I'd have to back up Johan on this one... more likely than not if you do a lot of high-bandwidth stuff (torrents, skype) over a period of time, it can eventually kill a wireless router.
Over the past 6-8 years, I've gone through no less than four Linksys routers. The first one bricked completely, holding down the reset button for factory defaults did nothing. The rest became chronically problematic.
When they start going, they exhibit the same problems you describe... constantly dropping its WiFi connection and/or sensing the SSID but never connecting successfully.
I've gone through the same routine.. suspecting the computers, suspecting my ISP, suspecting the cable modem (residence), suspecting the DSL modem (workplace). After a lot of deductive procedures, things started pointing to the wireless routers as the culprit. At $40usd, it saves me a lot of aggravation and time to swap it out rather than diagnosing EVERYTHING. Plus, in every one of the replacements, it WAS the wireless router at fault.
My latest Wireless Routers are Netgear brands. Out of the two, one died after a year... self-resets after every four seconds.. so it's not just Linksys. Being that all these units are typically made-in-you-know-where, I don't have any confidence they'll last too long. A Linksys I setup for an aunt and a Buffalo Wireless G at another location seem to be working OK for the past several years despite heavy wireless Skype usage.
If you haven't previously locked down the router's administration password AND encrypted the signal, it's likely your neighbors have been leeching off (abusing) your broadband and possibly contributing to the router's early demise.
All of the Toshiba notebooks I've come across include a utility called ConfigFree.. one of it's features is a realtime chart showing all the (open and secure) networks the notebook's WiFi antenna has sensed. It displays the SSID names in an orbiting chart where the stronger signals orbit closer. Hovering the mouse over each name reveals the channel it's on. My point is, if this is available in a bundled utility, there should be similar freeware/shareware utilities out there.
If you have a handful of neighboring WiFi signals on the same channel, that wouldn't necessarily dictate frequent dropouts. But as others have said, a neighboring Wireless-N, cordless 2.4ghz telephones and even leaky microwaves will cause problems.
A published book on this subject has recently been made available as a free PDF download: