I had that same issue (2Wire 3800HGV-B that has zero connection issue with at least 7 different device types kindles, printers, laptops, xbox, phones etc), I tried every security setting on the router, rebooted after each and still the tablet just saved settings and refused to connect.
WEP (Shared)
WEP (Open)
WPA
WPA2
I even disabled wireless security (no authentication required) and it still saved settings with no connection.
Last ditch I enabled Wi-Fi Protected Setup, but alas that also failed. I ran to a neighbor with Comcast and it just said connecting..waited 5 mins no change. Clicked said Forget Settings..tried again..same result.
Tried Panera Bread (only local free WiFi..found WiFI but refused to load the acceptance screen so I had no choice but return this brand new Nexus 7. Owned less than a day..never saw more than the chose language and WiFi screens.
I have to assume some units are defective (mine had 7OK number) or something in the OS differs in the batches? I had thought of keeping 1 more day and trying more friends connections..but at the end of the day if this device is going to be so particular about the router it makes it very inflexible and no good for travelling with. I hope somebody finds a definitive fix, then maybe I can try again ( I really wanted to love this device). For now money is back in the bank.
p.s. all the devices that can and do work with my router were turned off to ensure nothing caused a collision issue.