I have this problem too....... however it seems to cycle in and out from this 'local access' mode.
I think that the ipv6 settings helped a little bit, but realistically its hard to tell, as the problem was already quite cyclic.
I am using a Asus USB wireless adaptor, with Ralink chipset, which i have the latest drivers for. Using Zyxel 660HW-61 router with latest firmware, which is now nearly a year old
I was though using a MSI PCI wireless card (with the PCI version of the Ralink 2500 chip, and it completely failed at connecting.... the windows network icon would constantly flash between a series of grey 'signal strength' indicator bars, and the network disconnect symbol. Tried everything, drivers, the lot, nothing worked... occasionly it would connect for like 5 minutes, then nothing again....
Swapped it over to the Asus USB Ralink 2500 dongle, and the connection works better, except for the 'local access' issue which happens in cycles.
Everything works perfectly in win XP Pro though, the PCI Ralink card too.
Would have to be the most frustrating problem i've had with a computer....... especially when i'm in the middle of downloading a file, or on MSN