Try updating the wireless routers firmware?
Not sure if this is still ongoing, but.....
I recently exactly the same problem with a friends laptop running XP and yet all other laptops I tried at his house running XP connected just fine. Again all the settings were the same.
In this case the wireless router was a linksys model and it was a Dell laptop. It turned out that the problem lay in an incompatibility between the laptop's wireless card and the wireless router. Simply updating the firmware on the wireless router resolved the issue immediately.