I am no specialist in Apple products, but after reading the 2wire manual I found an interesting thing on page 9. It tells how to configure the wireless in Apple AirPort and the trick is to enter "$" followed by the ten digit encryption key. Could that be an Apple standard, including iPhones? Just a wild guess, but doesn't hurt trying.
Those screenshots looked really old, the GUI is nothing like that today. I'm guessing Mac 1995 era stuff
By the way the 2wire instruction mentioned the wifi password is 10-digit, not 8 like Getback mentioned. As it is hexadecimal type it can be only 10 or 26 digits basically. The hex part is where the problem arises. Earlier iPhone firmwares had a setting for hex/ascii passwords, now the setting is gone. If the dollar trick won't work then the only solution (from the forums) seems to be either leave it open or get a new router that actually works with non-hex passwords. Routers are cheap anyway.
