My parents bought an iBook 600 shortly before the 700 came out and their ethernet card stopped working. I plugged it in to my network and got no response. After thinking it was me or a problem with OSX file sharing, I was able to run a few tests to verify that it was the ethernet port.
We had an authorized Apple specialist look at it and shortly thereafter it was as good as new. My suggestion is that you get it back to Apple ASAP. It's under warranty, don't suffer with something like this, just take it in.
I'm sorry to hear you had a bad experience with the rep. I've never had to call the support line, but I've heard some bad stories. I work in an IT support center myself so I uphold pretty high standards, so I am even harder to please. Don't let it turn you off to Apple though. I know it is easy to try and blame Apple, but one bad apple shouldn't spoil the bunch (pun definitely intended). Honestly, it's just some lowly hourly who doesn't have a clue. It sucks that you have to speak to the guy, and that Apple didn't make a better hiring decision, but I wouldn't blame the company for the actions of one person who probably just cares about his paycheck, and not a crap about how much you paid or how much help he really gives customers.
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