Actually this router sucks, I switched it to option #1, and installed an old 802.11b router, and the thing worked without even running the wizard

I am going to try option #3 later, but at least I get connectivity right now.

I think you are getting good advice, and I can't say I fully understand the Option 1, 2, 3 stuff from the other posters, but I will tell you my experience:

1. Prior to AT&T, I used cable internet service with v3 firmwear of the same Netgear router you have. I would get cable model + netgear set-up and there followed random mis-connects, requiring powering (Cable model, router, PC down, rest, and back on in sequence. Router was set to report by PC's MAC address to cable service, but due to a defect in the router, it would lose the PC's MAC and not be able to report it back to the cable provider, thus requiring the lengthy reset dance to temporarily fix. It was a common and well-known defect in Netgear routers of the make at that time at least.

Currently, I use an AT&T wire DSL interface box with D-link DI-604 router for the past year with no problems. Router worked out of the box with no fuss at all.

Lost internet, three days ago when Microsoft's latest pushed security update and ZoneAlarm software firewall would not play nice. Quickly, fix by lowering Zone Alarm's firewall setting to "medium" and they issue their own proper patch yesterday.

FIRST thing, I do with connection problem is taking out the router from between the AT&T interface box and the PC. It that fixes the problem, then the problem is the router. AT&T seems to accept hardware routers and firewalls as normal; cable said "Bad! We don't support routers/firewalls."

In plain language - If your modem has a built in router then just turn that part off. Your router will do the router stuff better than those combo modems.

I was pretty happy with the 2wire I put at a parent in laws house a few yeas ago though, this was an sBbyahoo thingy, not sure if they still sell it. It had QUITE a nice feature list, VERY good range and remote access, and for the units, it was an easy reboot of one unit if something was wrong.

but indeed, a discrete modem and router combo is going to work better for more situations.

the router is probably just setup to do DHCP now, and the modem is authenticating. That will work fine, also allows you to still tunnel to the modem over the lan.