But it happens even without microsd card in it.
I have upgraded my firmware, fixed IP and DNS server already too. But the problem still persists.
Maybe I'll try your solution of changing the encryption method on my modem/router and see how it goes.
I've had the same disconnect w vstarcam. Like u I've tried everything thinking it was this problem or that, also thinking faulty cam but it happens to 3 cams even if I try them each. The reconnection on reboot is very misleading coz u think it is working.
In the end I believe it does have something to do wif either their firmware or WiFi module. My Vstarcam needs to have strong WiFi signal, can't be too far from the WiFi point. Within a room maybe, beyond that gets flaky. If u don't believe try putting it next to router, set WiFi N only, WPA2 AES-PSK security. See if it disconnects after say x time. Then slowly move it farther.
If u have multiple access points, be careful which it locks onto. If the farther one, flaky again. Disconnect randomly kicks in.
I have other brands of ipcam, some cheaper. No such problems with WiFi whatsoever. So in summary make sure yr vstarcam gets good signal strength and u should see the disconnect problems go away. In the end I almost gave up, now I have more access points near the ipcams so far perfect 24x7.