XBee + Arduino UNO Timeout problem

I'm having an issue communicating between 2 Xbee's I've recently purchased. One Xbee is mounted on a Sparkfun Xbee Explorer attached to my PC via USB, the other is mounted on a Sparkfun Xbee Shield which is attached to an Arduino UNO. The XBee's are Series 2.5.

I have configured both XBee's using x-ctu. I flashed the one attached to the PC as the coordinator and the one attached to the UNO as a router. Both were also updated to their latest firmwares and they're running with default settings at 9600 baud.

The issue I'm having is communication between the Xbee's is extremely flaky. I created a simple loop-back sketch on the Arduino which simply prints back what it receives. When I run the range test through x-ctu it occasionally works but times out just as often.

If anyone has any suggestions I would appreciate it.

I flashed the one attached to the PC as the coordinator and the one attached to the UNO as a router.

The XBees are typically configured as coordinator and end device, not router.

Is there anything that is interfering with the XBee communication? Electrical noise? Excessive distance?

Hmmm... Assuming that is true it should still work regardless of being a router or end device right? I thought a router IS an end device with added functionality.

I've tried with the XBee's right next to each other and also far apart (across a room), no difference. I can't think of anything that could cause noise.

Assuming that is true it should still work regardless of being a router or end device right?

How long would it take to test? Then, you'd KNOW.