Unstable Linksys BEFSR41 Router

I've been having an unstable connection and i've isolated the problem which is my linksys BEFSR41 v.2 router. Occasionally I experience lag spikes and this has become irritating when I'm playing online games. I'm running a Sony Vaio running Windows ME with, 256 mb of ram, 800 mhz. I've tried updating my firmware on my linksys but it doesn't correct this problem. I've tried downgrading to previous firmware versions but I'm still experiencing the same problem. I've tried to update the firmware and the router became broken for a while with the red diag light flashing, but i corrected this problem, do you think this has anything to do with the problem. This problem has occured out of no where and I'm out of ideas. Any help would be greatly appreciated, thank you.