I have the same issue with my iPod Touch 1G (v3.1.2).
My DIR-825 have latest Euro firmware. Tried WPA-TKIP, WPA-AES, WPA2-TKIP and WPA2-AES encryption. I refuse to set security to less than that. I've tried 802.11b/g/n as well as 802.11g only for the 2.4GHz band.
I have a Netgear CG3100 802.11b/g/n (wideband) using WPA2-AES encryption, I don't experience the issue on this router.
At work I don't experience the issue either, where we use Cisco and Lucent Access Points 802.11b, no encryption.
Tested on an old Linksys WRT54G using WPA2-TKIP 802.11b/g which doesn't have the issue either.
Please find a fix for this issue, it's MAJORLY annoying.
As can be seen on this screen (the blue line) the D-Link drops the signal constantly.
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And it's not because it's meshed in with crowded channels:
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