I just proved to myself that it is indeed Apple's OS X 10.4.8 that is causing a critical Wi-Fi bug on my Intel based iMac. (see iMac wireless Network troubles) Today I got fed-up with this issue and restored my iMac back to the original factory software - my iMac is from March 06, and Apple's OS X back then was version 10.4.4. With the original version of OS X installed, my Wi-Fi network works flawlessly, it hasn't dropped a Wi-Fi connection even once, not even when the microwave is in use.
It is so nice to have a working computer once again.
The problem is that I now have a working computer but also have a computer that has known security vulnerabilities that have long since been fixed.
I won't upgrade my computer to 10.4.8 until Apple acknowledges this issue and provides a fix.
I will contact Apple and try to get this issue addressed.