T60 and Audioengine W1 wireless audio adapter?

[RaviN]

I'm trying this USB wireless sound device
http://audioengineusa.com/w1_home.php
with my T60. The goal is to have low-lag wireless audio from the notebook to remote speakers while watching DVDs or high-quality concert streams
(e.g. http://www.medici.tv, http://dch.berliner-philharmoniker.de/#/en/)

The W1 does allow me to send audio from from Winamp, Windows Media Player, Intervideo DVD, and Media Player Classic wirelessly without any problems. There is no perceptible lag between sound and picture and the sound quality is very good.

I am having problems though with wireless Internet. The W1 is an 802.11 device that is supposed to find gaps in local wireless networks and broadcast its signals so as not to interfere. My wireless download speeds definitely drop by x2-3 when it is plugged into the T60, though. If I put the W1 on a USB extender ~10' away, connection speeds come back to 90-95%. Bring the cable end close to a USB port, 30-50% drop, put it on the keyboard near the wireless adapter, download speed goes to zero. Funny thing is that upload speed is not affected by much.
When the W1 is running plugged in to the notebook, wireless connectivity will first be slow, then drop out, and eventually reconnect.

The W1 has very little to configure and no software is required so there are no tweaks there. Their tech support has been helpful with things to try but are not sure why it is not working properly in this configuration. I am now open to the possibility that the wireless card or my router may need to be tweaked to deal with the W1 signal.

Configuration:
T60, XP SP3, 2GB RAM, 2GHz processor, Atheros 802.11a/b/g/n card, Netgear WGR614v6 router, cable modem - can get >10Mbps download, 480kb/s upload against http://netspeed.stanford.edu and http://speakeasy.net/speedtest/ through the wireless in a "clean" configuration without the W1 plugged in

Questions for the group:
1) Does anyone have experience with a T6x + wireless/W1 combination? Can it be made to work without compromising download speeds?
2) Are there any wireless adapter settings to tweak? I looked in Device Manager for my card but none of the settings looked appropriate
3) How about router settings?

I've looked at other wireless audio options including Airport Express (built in latency, requires Airfoil to stream non-iTunes media) and various Logitech products (beyond my budget).

Thanks,

Ravi