My connection problems.... help me please ...555..

OK, now I almost surely IDed problem: it should be my router.

My router is a D-Link 604. I followed the instruction to set it as:
Dynamic IP address
Clone MAC address

And in control panel, I set Network Connection: LAN connection1 as automatic detect.

Then it is sometimes ok, sometimes with packet loss rate above 5% (net becomes quite choppy at this level) and at worst time, upto 60% loss (literally useless).

Then what I did is this: I unplug the cable from the router and directly plugged into the wall jack. And reset my network connection using ISP provided IP, DNS..etc. numbers. Then wonder happens, for very long time (days) the connection is perfect, fast and smooth (ping
Question:
1) what is wrong with my router? Or what did I do wrong with it?
2) If I buy a new router, will it solve the problem?
3) If I am going to buy a new one (wired, I don ot like wireless ones), do you guys have any recommendation? :)
4) With or without a new router, what should I do when I am configuring them?
(I have to use a router, because there is my wife's computer I need to connect to the same network.)

Thank you very much!!