The IP Stack(or the monitoring code around it) has always been a little strange as the connectivity bars display in the lower right corner would eventually show disconnected(little X) even though it was fine. I was hoping 2.0.6 would fix that. Alas, it did not.
The monitoring code does the following: it pings the router (gateway) every minute to see if it can get a response. If it can’t get a response twice in a roll it will display a disconnection icon (even though the connection may still be valid). Also, if ‘Auto Connect’ is on, it will try to re-establish network connection. If DHCP is used, this re-connection can take a little while (the time out is 30 seconds). During the re-connection process the controller appears unresponsive, but it’s actually still alive. As soon as it re-establishes connection (or times out), it will come back to perform program scheduling etc.
Although uncommon, in some cases routers are set to reject ping requests, in which case the algorithm will clearly not work. In any case, I will figure out a more robust way to test connection and implement the auto connect feature. For now, turning Auto Connect off is probably the best work-around.