I don`t think you actually saved your settings and rebooted the router. See if you can follow these instructions and post back as soon as you hit a problem.
First of all you should set up the router using the blue cable supplied connected to an Ethernet port – RJ-45 connector not the RJ-11 telephone cable that you would associate with a standard telephone/modem connection. This is recommended but if you don`t have one on the Laptop you`ll need to do it wirelessly anyway. It`s only a security precaution I think.
Install the USB adapter software onto your computer BEFORE plugging in the adapter itself. Reboot and then plug it in. Your computer will recognise the new hardware and install the drivers for it. If you have done it the wrong way round you must remove the adapter, uninstall it from Add/Remove programs and reboot the computer. Start again!
Open IE and type in 192.168.1.1 to access the router admin pages. On the Setup tab click wireless and ensure that enable AP (Access Point) is ticked and, for the moment security is set to none. Now click the apply button. Don`t forget to save your settings by going to the Tools Tab and select System settings – Save then the Back button that appears on the page (Not the browser back button) then the Restart AP button to reboot the router. You may have to wait for a few minutes and then return to the admin pages. You`re WAN light should now be solid green.
Now go to Wireless Connection 1 on the Setup Tab and set up your connection details as before. They looked right to me. Again remember to Save All and reboot the router. You should now be able to access the internet on one computer. So far so good?