I'm not a great expert on this topic but I had similar problems with neighbour wifi interference. I Googled and came up with some free sofware called inSSIDer from a company called Metageek. (see www.metageek.net)
I read some of their tutorials and using the inSSIDer software it shows you graphically what is happening with the surrounding wifi networks to you.
What I learned if I can explain myself clearly is that each wifi channel uses I believe a 20Mhz spread of frequency. When you look at this shown on the inSSIDer software if a wifi network is using channel 1 for example it is using 10Mhz of frequency to the left of channel 1 down the frequency scale and 10Mhz to the right of channel 1 up the frequency scale which in the 2.4Ghz band takes you to the channel 3 frequency.
Which ever channel you pick to use for your network you use frequency spread of two channels to the left and two channels to the right
so channel 1 uses left of 1 and up to 3
2 overlaps 1 and up to 4
3 covers 1 to 5
4 covers 2 to 6 and so on up channel 11 covers 9 to 13
When you are in a congested area there are only the 3 channels of 1, 6 and 11 that dont overlap and therefore can not cause any interference.
What you said is correct you can use any channel you like when you have no neighbouring networks, if you want to use channel 7 thats fine and it will use frequencies from channel 5 to 9, but you neighbours must not be using any channels at either end to overlap with these or you might get interference.
Hope that explains not too technically what I learn't recently. I regularly use inSSIDer on laptop and Android app to see what is going on in the wifi world around me.
The other influencing factor is how physically close the neighbouring routers are to each other. If you live in suberbia in detached houses you will get less chance of interference because there will be weaker signals than if you live in a block of flats where neighbouring routers might only be a few feet apart the other side of the wall to your neighbours flat.
Edited by Jimneybob (Tue 13-Nov-12 13:45:52)