I actually had something similar to this last week... it might have been router failure, but I also wondered if one of the many devices* I had on the network might have been malfunctioning (or virus/trojan'ed). And dropping the router might have been enough to reset whatever that malfunctioning device was. *Devices include: X-Box, Netflix-thing-a-majig, IP TV device, 2 iPads, 4 iPhones, Wifi printer, 3 desktops, 2 laptops, etc, etc...
Depending on your level of technical inclination you can build a firewall / router out of an old pc and extra network card(s) which will be faster and more robust than a consumer grade device ever will. I run OpenBSD on mine and the only time it ever gets rebooted is when the power fails, which seems to be rapidly approaching third world reliability levels.
The distance between two antennas Basically there are some internet providers in rural areas that dont work on cables but use radio to go from location to location. This is often done using standard - just stronger - WAN equipment, plus very good directional antennas. And yes, this way you CAN cover about 20 miles from one tower to the next http://forum.mikrotik.com/viewtopic.php?f=7&t=41909 for an example.
Reliability issues are often heat-related. Routers get hot, so I keep mine on a cooling pad running 24x7.
I have found 2 quick things you can do to improve the wifi connection at home: 1. Try at all possible: move the wifi router closer to your computer(s) where you will be using the USB wifi dongles. 2. The USB wifi dongles usually come with a USB extension cord and a craddle. Situate this craddle as far away from the power supply of your PC as possible. I found that putting the USB wifi craddle+dongle on top of my desk got me a much stronger signal than leaving them dangling down from the back of the PC chassis below the desk.
Looking for info; Upgrading speeds available and thinking of best equipment...thoughts? here is the new speeds down / up; 22 Meg / 2 Meg current wired NICs in desktops 10/100/1000 best switch / router 8 port minimum...data quality (no dropped packets), good manufacturer cust service, etc...cost is not a concern currently using a Netgear and it has issues with hanging...so time to replace