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We consider the problem of optimal scheduling and routing in an ad-hoc wireless network with multiple traffic streams and time varying channel reliability. Each packet transmission can be overheard by a subset of receiver nodes, with a transmission success probability that may vary from receiver to receiver and may also vary with time. We develop a simple backpressure routing algorithm that maximizes network throughput and expends an average power that can be pushed arbitrarily close to the minimum average power required for network stability, with a corresponding tradeoff in network delay. The algorithm can be implemented in a distributed manner using only local link error probability information, and supports a "blind transmission" mode (where error probabilities are not required) in special cases when the power metric is neglected and when there is only a single destination for all traffic streams.