Limited connectivity "generally" comes about after the IP address isn't being resolved, and "generally" (again) if an IP address can't be automagically obtained the computer defaults one that looks like 169.254.blah.blah. U often get them on unconnected firewire ports.
What could be happening here is the router isn't allowing enough IPs to be allocated via dhcp. Often, as a basic security, it'll limit the number of IPs.
When u are connected with "limited connectivity", if u go into Run->cmd and use the command > ipconfig /all, u'll almost certainly see the above default IP address. This being the case, u'll need to get into the settings of the router and ask it kindly to co-operate with the number of devices asking for an IP address.