Oddity, posting here as might help someone.

Unplugged Vigor2860n briefly as needed to alter plug socket.. Plugged back in and no wireless at all.
Tried enabling/disabling wireless in GUI, no use.
Reset entire router to factory defaults, still no wireless whatsoever.

Then changed to 802.11b mode, pressed OK, router rebooted itsself spontaneously, when it comes back wireless now working.
Set back to normal 802.11g+n mode, and now working fine..

Problem solved.

VERY strange!