Point blank range.................. wireless device right up to the receiver in clear line of sight. It will indicate if signal strength has anything to do with it.

Will it work OK with Windows? I guess you would have to try that on another machine?

If you boot up and use the PS/2 keyboard then use the other one, which I guess has a USB connection? is it recognised then.

Try using a different USB port, and disconnecting all other USB devices before you boot.