I have this exact same problem. I get 1 dot of signal on the indicator. Speed tests are blazing. Wifi Analyzer shows signal going up and down.
I noticed this also after going to frg01. The wifi signal meter in the notification bar shows no signal strength and the wireless option in the settings menu says poor signal. This is a non-rooted phone, just the stock build.
I ran Wifi Analyzer and it shows my wifi signal as cycling on and off. It will spike to a good signal, 60db, then immediately go to no signal, then back to full strength, over and over. I can see other wifi networks with Analyzer and most are poor strength but consistent, just varying slightly over time.
I've rebooted everything including my phone and router, shut off my laptop, switched the router from mixed N,G,B mode to just N then just G, stood next to the router while rebooting the phone, switched the router channel. Nothing has seemed to help. Speed Analyzer shows my download speed as normal, 2.4Mbps on a 3Mbps line.
I'm thinking it may be the router but I haven't tried connecting to another network to test. Is this normal for the Droid to cycle or ping the network every few seconds or should I see a more consistent signal from my router?
Everything else with the frg01 upgrade seems fine. Battery life is about the same or maybe a little better, no other issues I've seen.
Someone mentioned the alarm app being gone and only accessible through the clock app. I had an alarm shortcut on my home screen prior to the upgrade and it is still there and works, takes me right to the alarm settings. But I can't see how to add it now either through the clock app. Just fyi.
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