Just an update for all you believers and non-believers:
I received the new Roku Digital Media Player two days after calling it in as defective. It was a cross-ship, so I took the pre-paid shipping label out of the new box and put it on the old one, called FedEx, and the non-working unit was back to them in a couple days.
The new unit works perfectly. Adjusted the "secret screen" setting for maximum signal transfer, and have only had it pause once for buffering. I assume that Roku makes so many of these, they simply don't have them "burned-in" or tested when they leave the assembly line. In my previous life in consumer electronics manufacturing, our company religiously tested all products before packaging to ensure customers had working units out of the box. C'mon Roku - have the folks in China test these things!
Many thanks to the team at Roku for makiing a pretty neat product for only $99 retail! And thanks for the fast resolution to the trouble!
My configuration (in case you care):
: Wireless, set for 3.5Mbps, four-dot quality, 16:9, analog outputs (S-video, Stereo L & R) to A/V receiver
: Netgear RangeMax Next WNR834B, set 270Mbps, channel 11, no SSID broadcast, WPA, MAC address restricted, 40 feet from Roku
: Cox Communications, Phoenix; Preferred Plan (9Mbps)