I have downloaded the Feisty daily build of April 15th (since I don't have an Ubuntu internet connection without wireless, (dual boot windows)). Reinstalled the system and started again. Kernel 2.6.20-15-generic (AMD64), used synaptic to get Ndiswrapper 1.9 installed and Ndiswrapper common. Downloaded Ndisgtk from the repositories using windows, and installed the DEB under Ubuntu. Checked if all dependencies were there including Network manager and Gnome network manager. Emptied the /etc/network/modules file accept for the loopback, and added ndiswrapper to the modules file. Installed the suggested 64 bit windows driver for Asus Wl-138g (which never gave me problems before). 

End result was still the same: 
- No internet.
- Ndiswrapper -l showed driver is present and ready. Ndisgtk showed drivers is not present ???
- Network card is found under dmesg and iwconfig without problems.
- Using Network-manager with WPA fails to connect the wireless card to anything.

Downloaded Wifi radar and used this after uninstalling network manager (+gnome dependency).
- No internet again (this may be also be user error, what driver needs to be used???).

Reinstalled Ubuntu (getting close to doing this with my eyes closed).
- Downloaded the latest 1.42 Ndiswrapper source.
- Installed this following site-manual instructions, did not use Ndisgtk.
- Tried network manager again, and again a no internet.. however this time the green dot on my side of the network blinked for a sec.
- Wlan0 was present and working, but fails to connect.

So I made a drastic decision:
- I reconfigured my router to use WEP-128 encryption instead of WPA.
  (I made access only available for the MAC address of my computer and my wife's).
- Reconfigured windows wireless (sigh, I wish this was similar in Ubuntu) and dealt with angry wife. 
- Booted in Ubuntu.
- Tried network manager with WEP, again failure to connect.
- Removed the Network manager (+gnome dependency) with synaptic.
- Opened Administration > Network 
- Unchecked the roaming.
- Filled in all the data in manual configuration (WEP key under hex and network DCHP settings etc.) using WLAN0.
- Rebooted and ... there was internet with everything!!!
- Add the network montior to the upper bar... and checked a few non-flash websites.

Thus:
- There are no network bugs in the clean kernel.
- Current CDrom Ndiswrapper 1.38 fails to work well with Kernel 2.6.20-15 for my wireless card, a 1.42 rebuild from source worked better.
  (This failure of Ndiswrapper may be Ndisgtk related. The two don't work together at their best, I wonder if the version is different at all to be honest.)
- WPA supplicant, network manager and Ndiswrapper definitively have problems working together, maybe the network manager options are parsed incorrectly to WPA and Ndiswrapper modules (could be rights related, simply the wrong parameters are given, or other changed for things since kernel 2.6.17.13).
- I don't know whether it is WPA_supplicant or Network manager giving trouble, as I cannot use WPA under manual network. But given that WEP also does not work in the network manager I assume the network manager has problems.
 
For an easier wireless internet this definitively did not work for me. Edgy was waaaaaayyyyy easier. (Although I have learned a lot more linux now).