Same problem here, 100% CPU usage with the majority being sys rather than user time.

some info:-

dpkg -l | grep network-manager

ii  network-manager                            0.6.6-0ubuntu2                network management framework daemon
ii  network-manager-kde                        1:0.2ubuntu1-0ubuntu12        KDE systray applet for controlling NetworkMa

lspci -vv

02:03.0 Ethernet controller: Atheros Communications, Inc. AR5413 802.11abg NIC (rev 01)
        Subsystem: Atheros Communications, Inc. Unknown device 1062
        Control: I/O- Mem+ BusMaster+ SpecCycle- MemWINV+ VGASnoop- ParErr- Stepping- SERR- FastB2B-
        Status: Cap+ 66MHz- UDF- FastB2B+ ParErr- DEVSEL=medium >TAbort- <TAbort- <MAbort- >SERR- <PERR-
        Latency: 168 (2500ns min, 7000ns max), Cache Line Size: 32 bytes
        Interrupt: pin A routed to IRQ 7
        Region 0: Memory at f8fe0000 (32-bit, non-prefetchable) [size=64K]
        Capabilities: [44] Power Management version 2
                Flags: PMEClk- DSI- D1- D2- AuxCurrent=375mA PME(D0-,D1-,D2-,D3hot-,D3cold-)
                Status: D0 PME-Enable- DSel=0 DScale=2 PME-

uname -a 

Linux paul-laptop 2.6.24-12-generic #1 SMP Wed Mar 12 23:01:54 UTC 2008 i686 GNU/Linux

Mar 22 08:28:55 paul-laptop NetworkManager: <info>  SWITCH: found better connection 'ath0' than current connection 'eth0'.
Mar 22 08:28:55 paul-laptop dhcdbd: message_handler: message handler not found under /com/redhat/dhcp/ath0 for sub-path ath0.dbus.get.reason
Mar 22 08:28:55 paul-laptop NetworkManager: <info>  Will activate connection 'ath0/MYSSID'.
Mar 22 08:28:55 paul-laptop NetworkManager: <info>  Device ath0 activation scheduled...
Mar 22 08:28:55 paul-laptop NetworkManager: <info>  Deactivating device eth0.
Mar 22 08:28:55 paul-laptop dhclient: There is already a pid file /var/run/dhclient.eth0.pid with pid 5595
Mar 22 08:28:55 paul-laptop dhclient: killed old client process, removed PID file
Mar 22 08:28:55 paul-laptop dhclient: wifi0: unknown hardware address type 801
Mar 22 08:28:55 paul-laptop dhclient: wifi0: unknown hardware address type 801
Mar 22 08:28:55 paul-laptop dhclient: DHCPRELEASE on eth0 to 192.168.0.1 port 67
Mar 22 08:28:55 paul-laptop avahi-daemon[5071]: Withdrawing address record for 192.168.0.4 on eth0.
Mar 22 08:28:55 paul-laptop avahi-daemon[5071]: Leaving mDNS multicast group on interface eth0.IPv4 with address 192.168.0.4.
Mar 22 08:28:55 paul-laptop avahi-daemon[5071]: Interface eth0.IPv4 no longer relevant for mDNS.
Mar 22 08:28:56 paul-laptop avahi-daemon[5071]: Withdrawing address record for fe80::20b:dbff:fe05:bf88 on eth0.
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) started...
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 1 of 5 (Device Prepare) scheduled...
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 1 of 5 (Device Prepare) started...
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 2 of 5 (Device Configure) scheduled...
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 1 of 5 (Device Prepare) complete.
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 2 of 5 (Device Configure) starting...
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0/wireless): access point 'MYSSID' is encrypted, but NO valid key exists.  New key needed.
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) New wireless user key requested for network 'MYSSID'.
Mar 22 08:28:56 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 2 of 5 (Device Configure) complete.
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0) New wireless user key for network 'MYSSID' received.
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 1 of 5 (Device Prepare) scheduled...
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 1 of 5 (Device Prepare) started...
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 2 of 5 (Device Configure) scheduled...
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 1 of 5 (Device Prepare) complete.
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0) Stage 2 of 5 (Device Configure) starting...
Mar 22 08:28:57 paul-laptop NetworkManager: <info>  Activation (ath0/wireless): access point 'CARIBO' is encrypted, and a key exists.  No new key needed.
Mar 22 08:28:58 paul-laptop NetworkManager: <WARN>  nm_signal_handler(): Caught signal 11.  Generating backtrace...
Mar 22 08:28:58 paul-laptop NetworkManager: ******************* START **********************************
Mar 22 08:28:58 paul-laptop NetworkManager: (no debugging symbols found)
Mar 22 08:28:58 paul-laptop NetworkManager: Using host libthread_db library "/lib/tls/i686/cmov/libthread_db.so.1".
Mar 22 08:28:58 paul-laptop NetworkManager: (no debugging symbols found)
Mar 22 08:28:58 paul-laptop last message repeated 10 times
Mar 22 08:28:58 paul-laptop NetworkManager: [Thread debugging using libthread_db enabled]
Mar 22 08:28:58 paul-laptop NetworkManager: [New Thread 0xb7be3720 (LWP 4975)]
Mar 22 08:28:58 paul-laptop NetworkManager: [New Thread 0xb73e1b90 (LWP 5549)]
Mar 22 08:28:58 paul-laptop NetworkManager: [New Thread 0xb7be2b90 (LWP 5384)]
Mar 22 08:28:58 paul-laptop NetworkManager: (no debugging symbols found)
Mar 22 08:28:58 paul-laptop last message repeated 9 times
Mar 22 08:28:58 paul-laptop NetworkManager: 0xb7fe1410 in __kernel_vsyscall ()
Mar 22 08:28:58 paul-laptop NetworkManager: ******************* END **********************************

let me know if I can be of any help...

Paul