I had a linksys "g" router hooked up to a wireless desktop and a PS3. i got about a 65-75% signal strength on both.my online gaming was fine, but i would start the matches late and sometimes have a...
The lag could be because of a latency between your router and the gaming servers you are connecting to. Not a whole lot you can do about that.
FYI, signal strength of 65-75% isn't bad at all and shouldn't have a significant impact on your wireless performance. Keep in mind that your internet connection is usually the bottleneck for performance. If your wireless runs at 54Mbps with 100% signal strength, when you lose signal, it reduces the performance of your wireless. For example, if you were to get to 40% signal strength, your performance could be reduced to only 11Mbps. While that is a drastic drop for your local LAN performance, 11Mbps is still faster than the vast majority of internet providers currently have, so your in-game performance shouldn't change, based on less signal strength or less bandwidth.
As for your "N" router, if you have a 5Ghz or 2.4Ghz cordless phone in the location where you installed the router, there is a chance that it is conflicting with that frequency. Since you don't have that problem on your "G" router, I can only deduce that if this is the problem, you have a 5Ghz phone, since "G" operates only at 2.4Ghz. If you still have the "N" router, disconnect the phone, re-install the "N" router and see if that fixes your problem. If it does, then you may want to either stick to the "G" router anyway or upgrade your phone to the newer "wireless friendly" 6Ghz phones.