After the newest update 2.1.8, I have found that connectivity while using any type of stream over 3g has improved immensely(with almost no drops).  Unfortunately, this has not fixed the streaming over wifi issue I have been having. 

I have the same issue as the op, except im on a rooted stock 2.2 Incredible.  When i attempt to stream any mpeg stream over wifi, mainly from radioio.com, as soon as my screen times out the playback stops, buffers for awhile, starts again, and stops over and over again.  This does not happen with 3g.  I attempted to reproduce the problem with other apps/streams, and it seems like the  only app that does not suffer the problem is pandora.  I have a feeling it has something to do with wifi going to sleep when the screen goes off, even though my wifi sleep policy is set correctly.  If that's the issue then pandora has programmed some type of wifi lock into the app so that the radio doesn't sleep.  (hours of googleing haven't turned up any solutions, but a heap of posts in regards to wifi sleep problems)

Any ideas would be greatly appreciated since i love xiia.