I don't think the switch is the issue, and a better switch won't help here.
A gigabit switch might help if you're transferring many gigabytes of files between two PCs both with gigabit wired connections through the switch, though.
The problem you're experiencing is just likely due to a combination of bad firmware on the router and bad drivers/firmware on your wireless card that connects in to it. It is made worse by not perfect signal conditions.
It is probably just trying to send data to your PC faster than the wireless link to the PC can deal with at the moment, it fills up the buffers in the router and it flakes out due to bad firmware rather than just lagging a little bit as it should do.
1) Look for a firmware update for your model and version of router, and install the most recent one available that's newer than your present one.
2) Update the driver on your wireless NIC in your PC too if possible.
3) Do what you can by moving the positions of the router antenna and the wireless NIC / antenna, and other nearly / interfering / blocking objects so you get the best possible signal between the router and NIC.
4) Check to see if you're using the same RF channel in your router settings as a majority of strong signals from your neighbors etc. Try channels 11, 6, 1, and maybe a couple in between and see if the problem gets better. Try to pick a channel that isn't the same as the strongest ones you pick up in the area from other networks.
5) See what kinds of antenna connectors, if any, the router uses, and estimate if you can improve your signal between the router and NIC by adding some $8 antenna to the router which is perhaps much better than the small one it already has. If your signal is less than 60% or so, maybe a cheap better antenna can help.
6) Check the router and NIC settings. Sometimes there are options to limit bitrates to be no higher than a certain amount. Sometimes it is possible to set one or the other to be Wireless 802.11B mode ONLY as opposed to 802.11G also. In any case if you limit it to 802.11B only, or if you set your maximum bit rate to something relatively low like 2 Mbit/second or 6 Mbit / second, that may improve the relative "quality" and reliability of the wireless link. Chances are it'll still be way faster than your internet connection, so you won't lose any real speed, but it may make the wireless error rate / wireless synchronization problem better.
7) Yeah you could replace either the NIC or the router or both with a better model. It sounds like the router has some issues, though it could also be due to bad NIC drivers making the router confused too. I guess if you intend to replace the router I'd look for something that does 802.11-draft-N that has good reviews for reliability / functionality. Actually you'd get the most benefit if you ALSO replace your NIC with an 802.11-draft-N compatible one since at least then you should have better signal and transmission capability between them. Not worth it if an $8 antenna would do, though.
