1) Make sure that you have not yet enabled any security protocol.
2) You can connect to your network without entering any details manually, simply by picking it from the list of available networks that is launched from a double-click of the WLAN icon in the Notification Area.
3) Enter Internet Options from within the Control Panel or from the Tools menu of IE. Move to the Connections tab and select "never dial a connection". Apply and close.
I've spent hours trying to ensure that the secuirty protocol on my router and laptop match (your point 1). And also that I get prompted to enter a WPA-PSK TKIP key (your point 2) All of which I have just achieved.
I now dont get the dial up box thanks to point 3, but I still cant connect.