I have the "connected but not working" issue.
I love that so many people instantly say "somethings wrong with your phone, swap your phone, get a new phone .. phone phone phone".
Well, I will say this is my second droid, and the issue carried along from one to the next (at least at home). I use a WRT54GL with the latest Tomato firmware installed. I'm currently running Cyanogenmod on my droid, but this happens under stock as well.
I will connect to the router, all is well... but eventually i will hop back on my phone and all data fails. If i turn wifi off it all works, if I turn it back on it works again ... until later.
I've had multiple devices using this router (iPhone, Nintendo DS, HTC Hero, Droid, macbook pro, asus notebook, other router, etc), I've had encryptions OFF, i currently have wpa2 ON... but it doesn't matter, no matter what I do this problem happens for my droid, but none of my other devices.
it's very annoying... i tend to only turn wifi on now when I need to use droidremote or boxeeremote