The bug is for WPA & WPA2 Enterprise. In our university wireless network (University of Bristol, UK, exact ) we have CA certificate (PEM) with some text before -----BEGIN CERTIFICATE-----. When I tried to add the certificate the file browser window that appear after clicking the file does not show the pem file, although it is there. When I deleted the text before -----BEGIN CERTIFICATE----- it started to show the file. The change is quite recent because in previous version of Ubuntu (8.04, now I'm using 8.10) there was any problem with running the net.
One workaround is either delete the text inside the file (but I'm not sure if it will still work) or adding the path to the file by hand to the network manager configuration (I'm using this solution). To do that one has to use gconf-editor, then go to the /system/network/connections; then choose the number of the connection (the given id/name under NM is in the key #/connection/id where # is a number). After indetyfing the connection, add/change the key #/802-1x/nma-path-ca-cert where the value is the name of the certificate file with a full path. (e.g. /path/to/the/cert.pem). Now NM should see the key but it's worth checking (I think it is good to switch kill the applet and run it once more cause I'm not sure if it sees the change straight away).
I can confirm this - and the gconf-editor workaround - in Jaunty 9.04.