I had that issue as well, where it would freeze if it transferred lots of data (as in, a large number of files in a dir would freeze it when doing ls on the terminal), and the problems went away with a higher-amperage power supply.

that's probably a bad dongle.

i connect my htpc via a Wi-Fi USB dongle as well. it runs both Linux and windows 7. and despite the os and drivers one model always hang after a day or so. another one, different model from same brand is online for months at a time.

it's mostly badly designed/tested hardware.

I was expecting a answer like "my dongle X just works on the Pi" :-) I do not doubt it is a problem with the hardware or the drivers, I just say it is a common problem with many dongle vendors specially in the Pi. I know I could buy a RPi-certified dongle, but I do not like wasting hardware if I can fix it just with a few scripts. No offense :)

WiFi on the Pi 'just doesn't work.'

You can get it working for a while, but it's nowhere near the reliability of standard domestic WiFi.

I've built various sensor/hardware projects and tried various dongles, and I've always had to switch back to a cabled connection.