As the topic says i have this issue only with WDlive… using the dongle with desktop or laptop it works fine with every channel! My WDLive is European version… Router is Netgear WNDR3700… WLAN is setted with North American Radio Setting. WD Live works only with channels (36, 40, 44, 48)
i have been using the WUSB600N v1 with WDTVL for months now. Never had any problems with it.
i am using the 5ghz ch to stream from network shares via WRT610N v1…
“WD Live works only with channels (36, 40, 44, 48)”
so it works but only on those channels?
maybe channel usage is governed by the laws of individual countries…so that it doesnt affect wireless isps, cellular operators…im just guessing here…i dont know for sure 
but i do know WUSB600N works with wdtvl…flawlessly…
I have my 5GHz N network on Channel 149. My WD TV Live and WUSB600N works fine on that channel.
It is a European regulation, related to the fact you have a WNDR3700 and European version of the WDTV Live.
From a WNDR3700 review-
“The 5 GHz radio can be set to channels , 40, 44, 48, 149, 153, 157, 161 and 165.”
in the comments section-
“The worst thing is 5Ghz Channel selection… realy limited (only 4) for european customers compared with Netgear APBridge WNHDE111 which has more than 11 channel for Italian customers. I cannot advice this router expecialy if you own a good single band and an access point to enable 5Ghz Network”
Allowable 5GHz channels by area-
http://en.wikipedia.org/wiki/List_of_WLAN_channels#5.C2.A0GHz_.28802.11a.2Fh.2Fj.2Fn.29
