The speeds and signal strength on all wireless devices in my house are substantially slower. Admittedly I have yet to update the firmware from the version that came pre-installed. I plan on doing this tonight.Has anyone else experienced this? Are there things beyond the firmware update that I can do to improve performance? If not this thing is assuredly getting sent back.
Cross-channel interference can be a killer and the problem is that by being on ch3 you are being hit by both ch1 and ch6. if you live in a tower block or terranced house (which covers pretty much every residence in central London) then the closer proximity will cause higher interference (rf signals attenuate over distance so the further you are from the transmitter the weaker the signal gets.) A little background info: clients on the same channel (regardless of SSID) will still work with each other to avoid transmitting at the same time.
clients on different channels won't be able to interpret each others' transmissions and so they are considered to be background noise. depending on the local RF environment the effect can be quite dramatic; dropping from 1MB to 80KB would seem to suggest a fairly crowded environment.
Depending on how busy the other clients are (the number of SSIDs doesn't matter it's how much data is being transmitted) you might find that you get better throughput by changing to the same channel as your neighbours.
There are also the usual suspects for interference: audio and video baby monitors; microwave ovens (but only when they're actually nuking something); cordless phones; and key fobs for car alarms apparently (I haven't bothered confirming that.) Based on what you've written I would suggest ch1 largely because there's some donkey on ch7 and that will affect you on ch6 and ch11.
You might also want to try your throughput tests at different times of the day/night to allow for periods of high usage (6-10pm can be the worst.) If someone is d/l'ing torrents (such as the ubuntu ISO of course) across wireless then you're pretty much screwed unless you ramp up the tx power on your AP and laptop wireless nic.
I have a similar router and am using Charter high speed and it works great. Yes you definitely want to update your firmware.
That usually never hurts. However one other thing I've noticed with Buffalo routers is that disconnecting the coax cable from the cable modem (while it's off) and waiting 30 seconds then reconnecting it and then powering up the modem seems to help some issues.
At least it did it my case. Maybe some residual previous settings weren't liked by the router or modem.