I dusted off and fired up my 770 few days ago and ran into the similar problem. If I scan for networks repeatedly it will sometime detect the ssid, but always fails to connect and get a IP lease.
I only tried this under 2006, 2007 and 2008; and the last time it worked I was using a different wireless router. Search for "wifi" and "blind" on the forum for few others having the same problem. I'll have to try rolling all the way back to 2005 to see if that may work, but I suspect the radio in the unit is bad.
All I wanted to run it was as a remote for my Myth TV box I am setting up too....
I've experienced behavior matching the description in Vinh's bug link: Connectivity usually works fine, but on one or two occasions that I was somewhere that there were many wireless access points, first I got a long list, then got nothing, or if there was something on the list I couldn't connect to it. Maybe I'll be able to run syslog (per the bug link) at some point. On my 770 I've been running OS 3.2006.49-2 forever.
Well rolled my 770 all the way back to 2005 and it now works!
I'm only using WEP on my personal router as I'm in a neighborhood that has no range for someone off the street to access my AP. However the neighbors in the last year or 2 now have AP running which is probably interfering with my 770 now.
I have noticed the same thing lately, I noticed that if I set my router to b/g instead of b/g/n it seems to work just fine. I assumed that it was my router messing with my 770. But then again it is no messing with my N800.
I tried downgrading and none of the older version will work when my router has N on so I just have to turn down my wifi router.
I have similar problem appearing ever since one of my neighbours brought a new wifi router. When that router is off everything returns to normal. It's annoying since I can't find ways to shield my tablet. I don't think it's due to too many APs since there are only 5 in my surrounding, and I had been in places with more than 30 APs that 770 works flawlessly
Does anyone know how to identify the brand and model of that router? That may help nailing down the problem.
I'm not sure if it is directly related to your problem, but that memory corruption bug is quite nasty and can cause all the kind of WLAN instability issues. Please report back if it helps.