OS X :: MacBook Disconnects Every Other Device To Internet

I just bought a MacBook. So far I am loving it. Unfortunately a very strange thing happens. Whenever I download something with the Macbook every other device at my house becomes unable to connect to the internet until the download is finished. It doesn't matter if it is a WiFi device or not. The connected devices are: a WinXP Netbook, an ubuntu9.10 desktop PC (please notice this is connected with an Ethernet cable, it's not wifi), a WiFi and a Samsung Bluray reader. To complicate things even further, I noticed that even the MacBook itself cannot do anything else (such as browsing the web w/ Safari and/or Firefox). I tried to download large files such as a movie from iTunes store and the iPhone SDK. The download rate is about 600Kb/sec.

I have a 6Mb/sec DSL w/ AT&T and the modem is a 2WIRE 1701HG. Granted, it's pretty cool to have a laptop that can hose wireless networks. These are some info from my network:
2WIRE 1701HG Gateway
Channel: 10 (2.457 MHz)
Authentication: WEP-Open
Encryption: WEP (tried also with WPA)
Channel: 10 (2.457 MHz)
Wireless Mode: 802.11b/g
Maximum Connection Rate: 54Mbit/sec
Power Setting: 4
SSID Broadcast: Enabled

Broadband Link
Connection Speed:
- Incoming: 6016 kbps
- Outgoing: 768 kbps

SL Connection Details
DSL Line (Wire Pair): Line 1 (inner pair)
Protocol: G.DMT Annex A
Downstream Rate: 6016 kbps
Upstream Rate: 768 kbps
Channel: Fast
Current Noise Margin: 14.0 dB (Downstream), 17.0 db (Upstream)
Current Attenuation: 31.3 dB (Downstream), 18.0 db (Upstream)
Current Output Power: 15.7 dB (Downstream), 11.9 db (Upstream)
DSLAM Vendor Information: Country: {0x00} Vendor: {ALCB} Specific: {0x00}
PVC Info: 0/35
Internet Connection Details
Connection Type: PPPoE
Domain:
Maximum Transmission Unit (MTU): 1492
Gateway Ping: Successful
DNS Communication: Successful
Configuration Server Post: Successful