Speaking as a former Tech for an Apple Repair Facility, it is true that "software" configuration and settings are not included in "hardware" warranty repairs and are considered the customer's responsibility. Any re-configuring or software related issues would be considered billable.

I would recommend either using the Airport Setup Assistant which should be installed on your iBook or try looking at the Apple Support website for Airport - or posting in the discussions. I sympathize with your experience and think it's a bit hasty to throw Apple away when the fix might be rather quick.