I am a relatively new user to MySensors, and I think a bug such as this needs to be described on the main page on how to build an Ethernet Gateway. This problem caused me a lot of frustation, and I don't know enough about how the hardware works to even realize that my gateway was being reset every 2 seconds. Anyone trying to build a W5100 ethernet gateway with a fresh Arduino install is going to experience this bug, and I think it will reflect poorly on the whole MySensors project if this bug is not highlighted on the build page.
The biggest benefit of the MySensors project is that getting up and running is relatively easy, but bugs such as this definitely make it harder.