Comment 46 for bug 193970

A summary of the thread for new readers:

If you are using Hardy 8.04 and have the kernel backported modules installed (linux-backports-modules-hardy), you will find a bug in the iwl (intel wireless) drivers. It has nothing to do with network manager, and if you don't use this module, you won't see the problem. The backport modules brings newer versions of the Intel wireless drivers to the 2.6.24 kernel of Hardy 8.04. This bug will surely be fixed. Apart from not using the backports module, there is an easy workaround:

The workaround: after re-enabling the kill-switch, do this from a shell:

sudo rmmod iwl4965
sudo modprobe iwl4965

for interest:
On the Toshiba, the kill-switch also turns off Bluetooth.
Bluetooth is reactivated when the kill-switch is turned on again.