There's a faster way around this issue:
1) Download the latest setup software for the webcam and the latest firmware for it.
2) Run software, setup the cam as a Wired ONLY connection.
3) Update the firmware - then reboot AND reset the cam back to factory settings.
4) Re-run software, again setup the cam as a Wired ONLY connection - right to the end where it allows you to register the device to your mydlink account.
5) Log into your mydlink account at http://www.mydlink.com
6) You'll see your camera in the view screen - working fine - but it's still wired.......
7) Click on the Settings Tab, scroll down and click on Advanced.
This will open a new window - and prompt you for the username (admin) and password for your cam.
9) Once you're logged in to the webcam's setup menu - you can see the tab for Wireless in the Settings tab here.
10) Wireless will be disabled (coz we've only setup the webcam as a Wired ONLY connection).
11) Enable Wireless, manually put in your wifi network's SSID and then choose either WEP or WPA - and enter your wifi network's password.
12) Save settings and exit.
13) Power off cam, remove ethernet cable, and power on - voila - it connects to your wifi network without any issues.