Network traffic I don't understand

I'm using Ubuntu 8.04 now, and unfortunately I have to manually configure my wireless usb device because for some reason auto-detect does not work. Also, there's not an option under automatic to allow WPA encryption, which I use.

I have my SSID and encryption stuff all set manually, however, if I change DNS to anything other than 10.0.0.1 I lose my connection. (It seems I mistakenly assumed the DNS should be the IP of my router...which is nearly the default cisco IP, nowhere near 10.0.0.1). When I run wireshark, it shows a great deal of activity between my computer, my router, and what I assume to be my neighbor's netgear router that my wireless antenna is just barely in range of. At times, if I run trace rt from an external website to my computer, it shows that I am connecting using Bellsouth. I have Comcast...I believe my neighbor uses Bellsouth. :confused: Wtf. The majority of the strange-looking activity are ARP packets from my router asking "Netgear" "Who has 10.0.0.1? Tell 10.0.0.2." Netgear will answer with "10.0.0.1 is at (insert random MAC address here)". I imagine I'm showing my ignorance in this area...but whatever. It confuses me. Any guidance would be hot! :)

You appear to be connected to your neighbor's wireless net. You need to disconnect and then connect to your own net. I'm not sure how you do that in Ubuntu, since I have no experience with that OS.

Yeah...that's pretty much the only logical conclusion, but I'm not sure how that's possible since I manually input the SSID and encryption information to connect to.

Call me crazy, but does it look like my router is submitting a query to my neighbor's router for info reguarding that DNS server it can't find via my usb wireless device?

If it can't connect, i.e. wrong encryption settings, wrong key etc. it'll probably try to connect to the first "open" network (your neighbors) it can find.