Don,
I had a lot of trouble getting my SB3 to work at first, but it was all network trouble - I didn't know my way around things like DNS, gateways, dynamic and static addresses, WEP, WPA, etc. EVENTUALLY I figured out enough to get connected, and gradually learned my way around those other networking terms.
I started out with a D-Link router, bought new at the same time as the SB, because this model was so highly rated here. Worked great! I must add, though, that I had no internet at the router. Can't get cable or satellite here. Still, it worked just superbly as a home network device. I used WPA and the SB is great at that. Happy, Happy.
I eventually learned of a high-speed internet service provided by the cellphone company. To get that onto my home network I had to junk that great D-Link router and get a TopGlobal router made specifically to support the cellphone internet connectivity. The TopGlobal is a terrible router. It constantly drops the wireless connection to my home network, and the SB goes down until the router comes back up.
Hence, I reverted to the old reliable ethernet from a dedicated laptop and NAS. No problems, now, but no wireless SB, either.
Bottom line - the SB3 handles WEP and WPA just fine. In my experience, its wired and wireless network performance is also superb and reliable. Sadly, a lame wireless network, such as one implemented by a TopGlobal or other unreliable router, just won't get it.
My advice - get your network all set, completely reliable, then connect the SB with ethernet cable temporarily, and then, when all works properly, start in on the wireless SB setup - first without encryption. Then put your encryption back on when long-term connectivity, almost certainly a router issue, has been proven satisfactory.