What are the main differences between the PSP Base and the 3000?

Referring to the bottleneck situation above, the bottleneck may not necessarily be your internet connection.
The only thing I can suggest is..[probably you don't want to hear..] that get a cable internet. Believe me you wouldn't go back to dial up ever again.

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Set this on your router. There will be security settings. Use WPA2 if you have that option. WEP is considered a trivial security method these days and can be cracked in minutes.
It will affect your wifi only in so much as you will have to enter the password on your computer the first time it joins the network after you have set the password.
If the server you're downloading from is slow, then you're going to get a slow speed.
Depending on the quality of your ISP, your connection quality may not necessarily be consistent. This is especially the case with Cable providers, where everyone in your neighborhood shares the same line.

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There's a reason why the internet is called the "information superhighway," and that's because the internet functions pretty much like a set of highways.
Your 100mbps connection from your computer to your router is like a driveway with a 11500 KB/sec speed limit. Then, your cable connection is basically like a narrow highway with approximately 2000 KB/sec speed limit (depending on your provider), but because it's shared, it almost always is in a state of a traffic jam; how bad depends on the time. Then, the server has its own driveway, and just like an inadequately designed parking lot, those may jam too.
General idea is - most likely, it's out of your control. Call your ISP and yell at them.
There's actually a number of things going on here:
100mbps indicates your LAN connection, but not your overall internet connection.
Your computer is connected to your router or modem at 100mbps, but your router/modem is likely connected to the internet at a much lower speed. So, anything that has to go out of your own network (basically, the internet) is bottlenecked by the slowest connection. An optimal 100mbps can achieve approximately 11.5MB/sec.

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what is your connection speed? click on the link to check ur speed. Usually on dial up connection R very slow.