You may want to :
Press Option-Command-P-R until you hear startup sound a second time. Reset NVRAM
The encryption type may be set to WEP. <-- May cause an issue.
Troubleshooting Wi-Fi issues in OS X Lion and Mac OS X v10.6
iOS and OS X: Recommended settings for Wi-Fi routers and access points
Intel-based Macs: Using Apple Hardware Test
Hope this helps,
Finally, I have found some solution for this irrating issue! Phew!!
The problem was with the router (I was using Belkin N150) and today I thought to just try and replace it with a Linksys Router N300 and it worked like magic!!!
I myself know how many sites and how many things I had tried but I am glad that I decided to try Linksys before deciding to buy the Airport Extreme. I am not sure what the problem with Belkin is as I had tried with all the possible settings listed on internet (both on the router and on my innocent mac ) but what I now know is that changing it is the best decision I took