Since it works with no encryption, I assume that the network interfaces are functional. Incidentally, could you verify that literally everything works correctly with no encryption? If you have the client computer set for DHCP, please verify that you're actually getting a DHCP assigned IP address from the router.
What you are seeing is your Windoze box *ATTEMPING* to send packets to a broken wireless connection. (I'm not sure I'm describing this very clearly). The send packets are not going anywhere. If you check the logs on whatever you're using for a destination router or access point, you'll find that nothing arrives. You can demonstrate the same effect by trying to "send" packets to an unplugged ethernet connection. You'll see a few packets being sent, but nothing received. Same problem.
Now, kindly double check your WEP key and be sure to use a Hex, not ASCII key.
If you want any furthur guesswork, kindly disclose the maker, model, hardware mutation, and possibly firmware version of your router and wireless client. There are device and version specific bugs.
Could you re-write the above sentence? I don't understand what you're saying. I think you say that you can see the lights flash. That doesn't mean anything.
As for the HEX and ASII key thing, i have no idea what your on about? i'm using the windows client to connect wireless networks (it's not AP specific).
I use a cisco 1230AG at home, works fine with other laptops apart from mine, I found something else out............... no matter what I enter for the wep key, it connects (says it does, even though it hasn't), even if the wep key is completely wrong. Rather bizarre and annoying problem!
Hexadecimal keys have characters 0-9 plus a b c d and e. ASCII keys use all the letters of the alphabet (except some punctuation marks). The router and client converts the ASCII keys into Hex to make it more "convenient" to enter the key. Number of characters Bits ASCII Hex WEP64 5 10 WEP128 13 26 The problem is that different manufactories have different ideas of how to convert ASCII into Hex. There are at least 2 such algorithms and I think I may have found a third. Windoze Wireless Zero Config only supports one of them.
Any particular wireless card or laptop? They're not all the same.
The 1230AG supports WPA. Why are you using WEP? WEP offers almost no security these days with all the WEP crackers around. Switch to WPA.
Yep. Windoze Wireless Zero Config is stupid. It offers absolutely useless connection progress information. To Microsoft, "connected" means that it has found a wireless access point and that it should begin negotiating the encryption keys etc. However, the stupid status messages says "Obtaining IP address" which persists until it times out with a "limited connectivity" message. Microsoft does not offer to mention that what really happened is that the encryption key negotiation has failed. It should have said "negotiating encryption key" and then failed. They just forgot this important message.
Dive into your 1230AG and extract the WEP key in Hexadecimal. It's there. Type that into the connection dialog and it will work. However, I would abandon WEP, and switch to WPA, which conveniently doesn't have the ASCII/Hex problem.