Hi Steve, the range and signal strength you have would seem to be well with tollerances, youve stated you dont have microwaves or cell phones or anything else.

The router you have is a single processor model. One for everything as opposed to one of the higher end ones with a processor for routing and a processor for wireless. (simplistic models here).

Id recommend before messing around with firmware you determine if your signal drop is due to overhead on the box itsself. Do you have other wireless devices. If so shut them down while using the ps3, can you remove any and all security from the router temporarily and just have the PS3 connect with no encryption. If you get a consistent lossless signal in either scenario the problem is definately with the router itself. As such id look at doing a firmware upgrade as a first and last course of action. If that doesnt work unfortunately you might need to look at different routing hardware.

I have a couple of WRV54G's at home and ive had no problems with wireless connectivity or routing. My only issue has been getting RFOM to work, but I think thats completely unrelated to my home network at this point in time.

cheers
jason