It sounds pretty simple, you didn't setup the WEP properly. The WEP will always lock you out if the key is not exactly right.
Connect with the ethernet cable and login to the router.
Turn WEP off at the router and then on the laptop too.
Disconnect the cable and try the wireless again.
If it works you know it is the WEP. The keys can be hex or ascii and different numbers of characters. Both devices have to be the same. You can only use the maximum bits available on either device. Almost all devices have the ability to drop down to lower levels with a menu setting. You also might want to consider if you want windows to manage wireless settings on laptop or if you want to use software that came with the wireless card or was installed on the machine. Usually all devices come with their own software that can be used instead of windows wireless networking advanced settings.
The networking and the WEP are basically 2 different things. The network is like a door and the WEP is like the lock.
It sounds like you just need to get your key matched to the lock. But since the door won't open, take the lock off first to confirm that the door works before you waste time on the lock.
The basic WEP settings are
How many bits- which means how long is the key
Ascii or HEX - what characters are used
The settings need to be the same as do the keys.
It is easy to enter the wrong key.
