As I mentioned a couple of weeks ago, I had been having some issues with my wireless connection at home. My suspicion was that this is an inherent issue with either 2701HG-B hardware or firmware.
To confirm my speculation, I ordered a ZyXEL WAP3205 Wireless N Access Point and configured it as a wireless access point. And as soon as I moved all my wireless devices from using the 2701HG-B wireless to the dedicated wireless access point, my connection issues completely went away.
For those who are using the AT&T 2701HG gateway (this seemed to be a popular device among AT&T DSL users) and are running into issues with frequent wireless connection drops, adding a dedicated wireless access point and re-route all the wireless traffic via the access point seems to be the easiest way to solve this problem.