I omitted to remove the needs-upstream-testing tag, I'm not that
familiar with all the LP functions.

I noted in the bug I that tested with linux-image-2.6.35-020635rc1-generic.
That has the same problems.

I tested again, with linux-image-2.6.32-0206322109-generic_2.6.32-0206322109.201008271507_i386.deb
from http://kernel.ubuntu.com/~kernel-ppa/mainline/v2.6.32.21.9-lucid/
$ uname -a
Linux ubuntu 2.6.32-0206322109-generic #201008271507 SMP Fri Aug 27 16:10:51 UTC 2010 i686 GNU/Linux

I tried this for a couple of days. The interface falls over after a few minutes to a few hours.

Here's what dmesg says about the insertion (hot-plug) of the device
with that kernel:

[ 1212.644016] usb 1-2: new high speed USB device using ehci_hcd and address 4
[ 1212.783305] usb 1-2: configuration #1 chosen from 1 choice
[ 1213.131068] phy1: Selected rate control algorithm 'minstrel'
[ 1213.132204] phy1: hwaddr 00:1e:2a:d0:49:db, RTL8187BvE V0 + rtl8225z2, rfkill mask 2
[ 1213.153627] rtl8187: Customer ID is 0x00
[ 1213.155570] Registered led device: rtl8187-phy1::tx
[ 1213.156396] Registered led device: rtl8187-phy1::rx
[ 1213.157119] rtl8187: wireless switch is on
[ 1213.157397] usbcore: registered new interface driver rtl8187
[ 1213.197568] udev: renamed network interface wlan0 to wlan1
[ 1217.014780] ADDRCONF(NETDEV_UP): wlan1: link is not ready
[ 1219.117222] wlan1: direct probe to AP 00:04:ed:b9:1c:d7 (try 1)
[ 1219.120218] wlan1: direct probe responded
[ 1219.120222] wlan1: authenticate with AP 00:04:ed:b9:1c:d7 (try 1)
[ 1219.121967] wlan1: authenticated
[ 1219.121984] wlan1: associate with AP 00:04:ed:b9:1c:d7 (try 1)
[ 1219.124965] wlan1: RX AssocResp from 00:04:ed:b9:1c:d7 (capab=0x431 status=0 aid=4)
[ 1219.124968] wlan1: associated
[ 1219.130471] ADDRCONF(NETDEV_CHANGE): wlan1: link becomes ready

And then I get only these items in dmesg:
[ 1986.324027] [drm] nouveau 0000:01:00.0: Setting dpms mode 1 on vga encoder (output 1)
[ 7582.500014] No probe response from AP 00:04:ed:b9:1c:d7 after 500ms, disconnecting.

After bringing the interface up (again static IP config, WEP encryption)
iwconfig reports this
ubuntu$ sudo iwconfig wlan1
wlan1     IEEE 802.11bg  ESSID:"My Net's home"
          Mode:Managed  Frequency:2.412 GHz  Access Point: 00:04:ED:B9:1C:D7
          Bit Rate=1 Mb/s   Tx-Power=20 dBm
          Retry  long limit:7   RTS thr:off   Fragment thr:off
          Encryption key:F43E-D0B4-6B
          Power Management:off
          Link Quality=64/70  Signal level=-46 dBm
          Rx invalid nwid:0  Rx invalid crypt:0  Rx invalid frag:0
          Tx excessive retries:0  Invalid misc:0   Missed beacon:0



While waiting for a response to the initial report I added a pci-based wireless
card to the system, which reports about -80 dBm vs -50 dBm from the netgear.
Not clear why the difference is so large, they are less than a metre apart,
(not too close, in case of interference).
The pci card antenna is connected fine, the system case is not metal (Dell).

I shut down this interface and started another test with just the netgear.
It failed in exactly the same way as before.

here's dmesg for when the interface comes up:
[90153.178570] ADDRCONF(NETDEV_UP): wlan1: link is not ready
[90155.261318] wlan1: direct probe to AP 00:04:ed:b9:1c:d7 (try 1)
[90155.263699] wlan1: direct probe responded
[90155.263703] wlan1: authenticate with AP 00:04:ed:b9:1c:d7 (try 1)
[90155.267184] wlan1: authenticated
[90155.267201] wlan1: associate with AP 00:04:ed:b9:1c:d7 (try 1)
[90155.269187] wlan1: RX AssocResp from 00:04:ed:b9:1c:d7 (capab=0x431 status=0 aid=4)
[90155.269191] wlan1: associated
[90155.274688] ADDRCONF(NETDEV_CHANGE): wlan1: link becomes ready

later I find the interface in this state:
wlan1     IEEE 802.11bg  ESSID:off/any  
          Mode:Managed  Access Point: Not-Associated   Tx-Power=20 dBm   
          Retry  long limit:7   RTS thr:off   Fragment thr:off
          Encryption key:F43E-D0B4-6B
          Power Management:off

and this in dmesg:
[90767.052019] [drm] nouveau 0000:01:00.0: Setting dpms mode 1 on vga encoder (output 1)
[91104.500017] No probe response from AP 00:04:ed:b9:1c:d7 after 500ms, disconnecting.


Reporting on this is being complicated by something strange happening
with logging using this kernel.
dmesg is updating, but I am not getting kernel messages in the other logs.
Every time I restart rsyslogd I get in /var/log/kern.log:
  Sep 17 21:17:11 ubuntu kernel: imklog: Cannot read proc file system, 1.

I see syslog messages for cron jobs etc but not kernel-related things.
Not sure if there is anything I can do about this, please advise.