Bad cat5 between the AP and the cable modem perhaps?

+ [desktop] -> usb -> [cable modem] -> Internet

- [laptop] -> cat5 ->[AP] -> cat5 -> [cable modem] -> Internet

+ [desktop] -> cat5 -> [AP]

desktop: 192.168.1.x
laptop: 169.254.x.x

If the AP isn't giving your laptop a 192.168.1.x IP address, it could be a number of things. Start with the networking equipment (network cable etc), then look at the settings via the web interface on the AP. That's the best I got.