I have the same issue, HTC Legend on O2, Android 2.2, Baseband 18.104.22.168U_7.13.35.05, webkit 3.1, all the latest OTA updates from O2, Netgear DG834G v5 running firmware v1.6.01.34.
Legend connects once, then if you go out, or manaually disconnect it, it won't reconnect again until the router is rebooted. Then it connects fine.
I'm using WPA2-PSK. All other Android devices - HTC Desire HD, Asus Transformer 101, Google Nexus One - connect without issue. They can connect, disconnect and reconnect without the router having to be rebooted.
Did anyone ever find a solution to this issue?