I had exactly the same problem with set up using my ipad or iphone, same message about wrong password. Like you, I did have the correct password. I set the WeMo back to factory settings, re-did everything in the setup instructions and it accepted my password. It takes at least 7 minutes after powering down and repowering the WeMo before it can be found. (as in when your lights blink or you move the WeMo to a different receptacle) While I was trying to get this to connect consistently, I received the firmware update notice and did update it.
A reset can possibly help to connect the devices to the WiFi, but it is best to check if the WiFi password is correct. Passwords are case sensitive and try not to include special characters. The steps on the following link may also help: http://www.belkin.com/us/support-article?articleNum=7960
Hi i am no techie but are you sure the password is right. Remember the password is to your wifi not your computer. I know i have mixed them up. If you didnt set up a wifi password it os possible that it uses a generic password. Sometimes you can google your router and see if it jas a generic pwd.
If you thinkmyou didnt set a pwd up on wifi look on the settings wifi page of ipad and see if there is a padlock. If there is there is a password.
Good luck. If it doesnt work tell me your router brand. Sorry for bad typing.