Desktops :: IMac Not Connecting To Wireless Router

I recently purchased an iMac desktop and installed it in my home office. It worked fine, except that the airport was connecting erratically to the wireless router, which is located about 5-7 meters away in a different room. I tried re-positioning the iMac to have better 'reception' but the problem persists. I can see the number of airport connectivity 'bars' changing every second and then going off fully. Very frustrating.

Could there be a problem with the iMac antenna? A colleague told me that if there's a wireless phone in the house near the router that can cause problems. Another told me that the router (a basic D-link 802.11g, 5 yrs old) needs to be replaced.