Lilsam, try giving your router a power cycle (unplug the ower for about 30 seconds or so), this may clear things up.
Santovan, that signal strength is not really strong enough- you will want to stick with the ethernet connection. As for the "key information exchange", I think the router and PS3 were not able to communicate when asking for the pass key on the encryption due to the flaky signal strength (if this is set up on your router).