A
simple way to overcome this problem is to disable the stock
antenna and connect to the repeater through wired LAN connection
only. Third party firmware like DD-WRT allow you to do just
that.
A
more effective solution albeit a more expensive one is to
use two routers [Fig. 2]. The Linksys WRT-54G still works
as a repeater station with the stock antenna disabled. A second
router is connected to WRT54G through ethernet. I have chosen
the Buffalo WHR-G125 for the second router because it generally
outperforms WRT54G straight out of the box.

Fig. 2 WiFi repeater setup with
two routers.
In
this scenario the Linksys still works the same way repeating
the distant access point. The second router WHR-G125 redistributes
the signal locally. It also works as a switch so you can hard
wire any local computers into the three available LAN ports
(you can also hard wire into the WRT54G's LAN ports).
You
may ask why all the extra labor turning off the local antenna
and connecting the second router. Why don't we just use a
router that doesn't use diversity in the first place. Well,
any router without diversity will have a single antenna by
definition. It is perfectly fine to use such router with the
stock or even a replacement high gain antenna. The problem
is that if you are attempting to repeat an AP that is far
away you will need a parabolic antenna
or a yagi. The radiation pattern of these antennas is concentrated
in the front. In other words, they will connect to the distant
AP just fine but may not leave a lot of useful signal behind
them and your local radio cell will have unreliable coverage.
This will cause your local WiFi connection to drop out frequently.
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