I had a WRT160N, and it only really dropped connections when too many devices/PCs were using it (20+).
How many devices/PCs are connected to your router? Is it just the internet connection that is dropped or is the LAN connection (if multiple PCs are connected) affected as well?
If you don't want to buy a new router yet, and you're already using the V3 firmware, a few possible fixes you could try are:
- Set it to Wireless-G Only mode
- Try changing your wireless channel from the default to something else (to avoid interference from other devices such as cordless phones, other routers in the area)
- Assign static IPs to your devices, so you can turn DHCP off and lessen the load on the router.
Most stable Linksys router I've ever used was the WRT54G...if you can find one.