Pete, Don't waste your time chasing this. I configured directly using AT commands on the serial pins using my long password and walla it worked. Must be something wrong with the HTML configuration page via WifI.
MORNING UPDATE:
So given what I seen with this, I don't know how I got it to work in the past. In any case, configuring directly using the AT command set seem to stick and allow it to connect to the AP and get an IP address. This suggests that there is something funky about the web config option that doesn't work properly. BTW, the chip reports it's VER as 1.4.4.
Hopefully when the MCU is put back everything will work as expected. I'll probably create (if one doesn't already exist) at sketch that simply sets WiFi credentials much like the DigiWifiReset utility sketch, only it (a config sketch) would set mode, security and credentials.
Also, anyone that wants to jump on the serial pins and talk directly to the chip would need a 3.3V compatible FTDI to USB board. The DigiX boards pin labelled TX2 connects to the FTDI TX and the RX2 to the FTDI RX. This is because the Wifi chip UART0_TX is connected a MCU RX pin that is brought out on the pin labelled TX2 and UART0_RX is connected to a MCU TX pin that is brought out on the pin lablled RX2. This is for the Kickstarter board, where the TX2 and RX2 silkscreen labels are actually wrong on the board and those pins are the physical TX1 and RX1 on the board.
See notes 11,12 here:
http://digistump.com/wiki/_media/digix/tutorials/digix-pinout-beta-097.pdfWARNING/CAUTION: I should mention that all this serial communication that I done directly to the Wifi chip was done without the MCU on the board. I do not recommend you do this with the MCU present. Better to be safe that sorry. Also, if the MCU is present and working you can always communicate with the chip via a sketch as it was meant to be. I did this because I had no other choice.
Hope this doesn't cause any confusion. Now back to contemplating how to get the SAM MCU down successfully.
P.S. I really need to start proof reading my long posts. Sometimes my brain fills in the missing words or loses context along the way like communicate vs. communication.