Major Speed Problem - Router Might Be At Fault

I'm having some really bad speed issues with my Cable internet recently. I've been working hard to diagnose and fix the problem, but to no avail. I'm hoping someone here can help me figure out the problem.

Situation
I'm a major PC gamer, and have recently been bitten by the WoW bug. Things started off well enough, but for the past few days, according to WoW, I'm getting some really bad latency readings, going as high as 4000 ms. Not only with WoW, but my overall Internet experience slows to a crawl. Websites take forever to load or don't at all; downloads are below 10 kbps; FTP to my website is unaccessible and Traceroutes to Google generally take 1000+ ms to read beyond the router.

The Setup
I have Shaw Cable internet with their standard non-configurable modem. We originally had it connected to a D-Link WBR-2310, but with this problem we decided to replace it with a DIR-625 router. Changing it did seem to work at first for the first couple of days, but this problem has started again. One desktop with Vista Home Premium SP1 is connected to the router via Ethernet, while all other computers (mix of Vista and XP) connect wirelessly.

What's Been Done
The problem generally seems to stop when both the modem and router are powercycled. Speeds are fine until a few minutes later, when it starts to slow down again. Everything in the router is properly setup, with it broadcasting in G only at Channel 11. Shaw Cable has stated that everything between them and the modem reads fine (but still think I'm stupid regardless).

What's really weird is with the Vista desktop connected with Ethernet. Whenever the user tries to look for other devices on the network (like my laptop), it struggles and then completely kills the router and no one can get online. It requires the desktop to be restarted to regain Internet functionality on all computers.

What Might Be The Problem

1. The new router's probably just as messed up as the WBR-2310. Another one may be in order. This seems awfully unlikely, since we thought the last one was defective...

2. Somehow, I have no idea how, the Vista desktop via Ethernet seems to be acting as some kind of controller. Like it's possibly leeching the bulk of the bandwidth and leaving wireless users high and dry. In the past, when the desktop via Ethernet was an XP machine and connected to an even older D-Link router, NOTHING like this ever happened. EVER. It might be possible to stop this by removing the Ethernet and having that desktop connect wirelessly like the rest.

I'm at my wits end here. I'd like a stable connection so I can do ANYTHING online again. Is it possible that Vista on the desktop is trying to do stuff it shouldn't and causing all this headache?

Thanks in advance to those who provide reasonable responses.

 

Can't you use the cable modem as modem only and buy a separate router?

 

I'm afraid I don't understand. Right now, it's the Shaw Cable standard modem, which is just a non-configurable modem. It just plugs in and either the Router/Computer needs to be configured.

 

Connect a single computer directly to the modem. See if the speeds drop and what not... If you really needed more than one computer online, Shaw provides two ip addresses with their residential package. (You can use a switch to connect another computer via ethernet)

I've only experienced such problems with Shaw when my internet was 'disconnected' when I downloaded too much (over the cap 3 months in a row). But they give you a phone call about that one

[Edit]
The modem (in reality) is configurable (by Shaw) and sometimes you can even check the diagnostic at 192.168.100.1, but it's generally useless to do so...

 

I have tried the direct connection to one computer (my laptop), and everything seems to run perfectly. Which leads me to believe Shaw is telling the truth that the line test is fine. It has to be something with the router, and possibly the Vista desktop using Ethernet...