Neoflex router problem

when I say the same adapter, I mean physically the same adapter.. not 2 of the same type.

Do you also maybe have MAC Filtering enabled on the Router.. you might need to add both MAC addresses to enable them to connect.
 
Tried changing the usb Wi-Fi adaptors, same story. The only way both pc's connect is if I put the encryption off.

I've seen this kind of problem on a brand new Billion ADSL router last month. Problem went away when I changed from WEP encryption to WPA encryption.

If that doesn't work in your case, disable all encryption but enable MAC filtering, then add the MAC addresses of your computers to the "allowed" list.
 
Is your desktop by any chance running XP SP3? If so, it could be a problem related to the black hole router syndrome, where the DHCP server doesn't send out a certain option that SP3 is expecting, and then fails to receive an address. There is a patch availble somewhere on the Microsoft site for this problem.

If so, maybe try assigning the addresses manually on both laptop and pc, as well as disabling all security and then slowly testing until you find the culprit.
 
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