...I am told that the type of router I use will make no difference to this reading and that this inexpensive router is just as good as more expensive ones (with more than 1 antenna etc.). Is this true? And can anyone tell me why a computer 10 inches from the router reads the signal strength as "low"?
Doug, I have not owned the d-link, but have much experience with other wifi routers - -from Linksys and Netgear through to big-iron commercial-grade products. At the distances you describe, all routers should show a signal strength of "excellent" (as long as there is no interference on the signal path, highly unlikely in the scenario you describe).
I suggest you power down the router, power down all PCs, then power up the router and then power up the PCs. If you still get the same signal strength, then d/l and install Net Stumbler (www. netstumbler.com), which will let you see the signal-noise ratio from the radio portion of the d-link.
It's hard to say if the router is defective, but my intuition says it is not. Be sure to check the seating of the antennas.
Let us know the outcomes of a re-boot, and we'll go from there.