I've got a linksys wireless router and had similar problems when I was trying to set it up.
There is a 'restore factory settings' slot on mine where you have to jab a paperclip in for 10 seconds (until all the lights start flashing). I had to do this loads of times until I got the settings correct.
Also, I used a network cable from laptop to router to do the initial setup. If there was a network cable between pc and router I never had a problem seeing 192.168.1.1.