So the wireless connection is not working with the WRT54G. That isn't surprizing at all because there have been countless people in here with the same router and the same complaint. Some versions work ok, others not so well. With 12 different versions of the same router it's difficult to keep track of which ones work or not.
You should try to install the latest firmware from Linksys. The latest firmware for your version 8.2 fixes many of the problems with your router and Windows 7. I highly suggest you try everything possible to get the firmware installed.
Firmware 8.2.07 build 011
- Resolves issue with not being able to block IPSec pass-through.
- Resolves issue with router disconnecting from some particular online game servers.
- Resolves issue with user not being able to get incoming video and audio when video phone is connected to the LAN hosted by the router.
- Resolves issue with WEP 64-bit key not being properly validated when user enters the key.
- Resolves issue with disabling UPnP not being effective until the router is rebooted.
- Resolves issue with Wireless MAC Filter not working properly when there are more than 32 entries in filter list.
- Resolves issue with DNS vulnerability.
Linksys by Cisco - WRT54G Support
In any event, I can just about guarantee you that your router is the cause of your problems, hopefully you can get it working with the firmware update.