You are correct! I've been using 1G switches .... pulled out the ol' 16 port 10/100M router and all of the sudden it works fine -- no more rebooting.

I threw up a quick blog post on what I did:

http://www.stevemilner.org/blog/2010/05/17/hello-guruplug-you-jerk/

I just got my Guruplug today and am having similar issues. I can connect to it via wifi as long as I don't plug any ethernet cables in. The moment I do plug in a cable the wifi stops and I get lovely a red light. Used multiple cables, plugged into different switches and routers -- same result. One jack causes it to reboot over and over. Scratch that, they both force reboots over and over!

I'm starting to believe the root password should have been "noplug4u" without the quotes. 

Also, be very careful with the network jacks if the plug has been running for more than an hour -- the metal there is very hot!! 

Seriously though, I'm getting pretty frustrated. Like a lot of people I preordered because it really is a great idea, but so far I've had nothing but problems straight out of the box!