I have my BB8900 setup to connect to my home router, but if I set options>Mobile Network>Data Services>Off, then I am not able to browse.

The device is urely using the wifi connection since I have mobile network switched-off (i.e. Manage Connections>Mobile Network>unchecked.

Why does it need to have Data Services On? Has anyone else noticed this?

When i turn off my mobile network, i can still browse the net and make calls via UMA. On you home screen, is the wifi icon white, or is it grey. If it is grey, then you are NOT connected to your wifi network.

It is definitely going thru wifi (works even with no SIM). but I have to have data service ON otherwise I have no access to the internet.

GO to Options --> Advance Options -->Browser --> Set Default browser & MDS browser configuration to INTERNET EXPLORER...

& Make sure your WIFI services are on in network option...

This should help you

thanks for the info but...
under option>advanced options>browser all I've got is 'Default browser configuration' with the options 'WAP Browser/Hotspot Browser'
and 'Default WAP browser configuration' where the only option is 'WAP Browser'.

So setting default browser to 'Hotspot' (with data off) and it doesn't work. Only if I switch data on will I be able to browse (even if I have no SIM installed).

I've read somewhere in the official doc that data services also disables the browser. Is this true?