I'm experiencing these symptoms. WHR-G300N Ver.1.64 (R1.05/B1.09). Wireless breaks for a few seconds in the middle of large transfers, like an itunes podcast download (so wan-wireless), moving directories between machines (wireless-> wireless), backups (wireless->wired NAS). Auto channel selection is off, which should be the default I think - it was the cause of a slew of other problems.
Breakage happened reliably when I started itunes on my XP wireless laptop. I have my music library on a (Buffalo) NAS, wired to the WHR. The Itunes downloads directory is also on the NAS, and itunes was configured to start downloads on startup. With *no other* network traffic on my LAN, and monitoring RTTs with ping from laptop to NAS, I would see a spike in RTT and then timeouts, lasting a few seconds, enough for windows to take the NAS filesystem offline. If I happened to be playing music at the time, itunes would mark the song as missing (really annoying).
Ping RTTs from the (wired) NAS to the WHR never change. So my symptoms are isolated to wireless. However, this is definitely *not* a channel problem. I've tried all channels and the RTT spikes manifest only and always on sustained read/writes to the NAS (which is really my only way to generate sustained network traffice easilty), or on sustained writes between wireless devices. The spikes don't always necessarily result in timeouts (at least according to ping), but they are always there with sustained network traffic. Seems to happen more often on writes, but not enough evidence of that to be sure.
Nothing in the WHR logs for the times of outage. Simultaneous pings to the WHR from laptop also showed timeouts, so it seems the device itself is dropping packets. I haven't hacked IP in 20 years but it sounds like a queue/buffer size problem to me.
A workaround for the itunes problem was to make the download folder "available offline". This didn't stop the network outage but would allow me to start itunes without losing the folder. My music directory is entirely too large to make available offline, so I currently cannot listen to music while there are downloads.
This is extremely frustrating. Willing to work with it a few days but very close to exchanging for another brand. A wireless router that loses wireless when it gets traffic is worse than useless.
-Christo