Here are the steps that are required to connect your iPod/iPhone to a LiveBox (Wifi) I have had the same problem.
Configuring the iPod/iPhone
Go to Settings
Move the little slider and the Confirm Access cursor to the right
Select the small blue arrow (network) and select "Forget this network"
Return to the main menu, choose Settings, then WiFi and wait for the iPod Search all WiFi networks. Click on the name of your network (not the blue arrow but the name of your network).
The iPod then asks for a password. This password is the WEP key of the Livebox (it is located below it)
Enter the WEP key respecting uppercase (press the arrow below the Q, at each letter you write) AND WITHOUT SPACES ...
*Do not press "Join" immediately , you must first put the Livebox in pairing mode *
Configure the paring mode of the Livebox
Press BUTTON 1 of your Livebox to put it into pairing mode. The LED flashes WiFi Livebox, and now with the iPod select "Join".
Wait a few moments that connects the iPod, from now you can surf the Internet.
Setting the Livebox into pairing mode is done only once.
Hope this helps !