Don't know which modem you're using but I think most of the USB modems supplied with broadband can supply up to 8meg ?
Until recently - when I went for BT's 2100 to support a wired/wireless network - I used the original SpeedTouch "frog" on BT Yahoo BB which happily coped with upgrades from the original 512 to 1 meg and then to 2meg without problems.
Personally I've had no real problems with BT in over 5 years of BB so cannot help with your "dropout" problem. Certainly most on this forum would suggest a third party firewall (free versions are available) rather than the Windows built in version.
Try Zone Alarm, Avast, AVG etc. Do you have antivirus & antispyware installed ? If so, do they give clean scans ?