Before you return it try a few more things.
When you play music from CD that you have already ripped, does this cut out too? If it does then yes, there is something wrong with the unit.
The other thing to remember regarding getting anything through the internet is that there is a possibility that the B2 is fine AND the connection to your house router/WiFi is fine BUT the connection from the router to the outside internet is poor (this could equally apply to your next door router).
It it is saying "waiting for data" this is probably the problem. The B2 cant play what it isn't getting!!
Try looking at your Router's statistics/performance if you can. (sometime Unplugging the Router waiting 30 seconds and plugging it bac into the mains - and waiting for it to reboot - helps).
From what you describe I really think that the B2 is not the problem. But Brennan do stand by their units and our experience is that is there is an issue they will sort it for you so give them and this forum a chance to help.
One other thing if you have not done so yet, using the front screen and round knob, do a "main menu > settings > Web Upgrade" to ensure you are on the very latest software version for the unit (7 th September).
Fred