#2 sounds like a corrupted/improperly loading IOATAFamily.kext or IOCDStorageFamily.kext / IODVDStorageFamily.kext gone bad. If the drive is known good, and the connections are solid, I'd try first running the combo updater for the
currently installed OS X version you're using. Then I'd repair permissions afterwards (because you just
know OS X is going to screw up permissions on install).
When you try DU, check Activity Monitor and see if any other processes are holding onto the disc/drive. It only takes one errant app that was poorly coded (i.e. makes the OS actually choke) to grind functions to a halt.
#1 - You noted you're using a neighbor's channels. Have you tried just connecting to your own router and seeing if the problem persists? That'd be my first troubleshooting step, just to eliminate the "outside variable". It doesn't matter if your router does G speed only - the airport card will autonegotiate down to G speeds easily. I know you want good speed, but if the problem goes away when you use your own router, then I'd suggest either living with G speeds or updating the router. One other likely cause is that your router is interfering with the airport card's connection to anything else.
Failing that, set your laptop's Energy Saver prefs to wall socket power and see if that helps (while obviously connected to a wall socket). Airport on battery power can be fickle sometimes, but usually only if the battery itself is retaining less voltage in its charge than is needed to run certain power hungry peripherals.
These steps may not solve your problem, but they can at least help narrow down the causes. And anything's worth trying, right?