A wireless client can connect just fine to the radio and gets an IP address from the pool but can not access the internet or resources on other VLANS. The wireless devices should be in their own subnet.
Your questions prompted me get SDM to work. I upgraded to the 12.4(15)T IOS, got the wireless application in sdm to work and then realized my mistake! I had to specify "ip nat inside" on my dot11radio interface. Makes so much sense now. :)