One of the techs in our IT department at school was telling me about a problem similar to what some of you are describing. Aparently Windows XP has a service (in your services.msc I think) that reauthenticates/reconnects with a wireless network every 45-60 seconds. For networks with any form of authentication this means that you are often disconnected for 2-5 seconds or so. In addition, windows has to search for the connection again.
Unfortunately, it was just mentioned to me briefly so I forget the name of the service. If you can find it though, disabling it won't hurt anything.