I think is the Airport Router. I tried connecting internet via Airport Apple from my friend PC (with internet through his Airport Apple router). It didn't work. So I went to my close friend and tried the WiFi with a Netgear and it worked! I have no idea why the Airport Apple didn't work (it had only less than 8 digits for password compare to my Netgear friend one with had like 15, I am not sure if the password length plays a role. The connection was both tried on a WEP.)
Test it with someone else who has a WiFi to comfirm that whether is your iPhone or the Airport... A close friend or cousins perhaps?
If it still doesn;t work... Retry to restore it using
http://iphone.unlock.no/ and the program ZiPhone. If still nto working, then reinstall the firmware and using Zipphone to unlock it again?
All this happened on 1.1.4 and now is working perfect!