I can confirm the issues with Ralink/rt2500 based cards on Ubuntu 6.10.
The reason is that 6.10 is shipped with a faulty driver that causes
these problems. Usage of Wpa-supplicant is not possible either at this
point as a workaround. Indeed the only way to get the card working with
the default driver is to do 'sudo dhclient ra0' after every startup.
Needless to say this is a pain. Well... there is good news. I solved
this problem and it was not too hard (I am not a linux expert but I will
post the steps I followed). To put it in simple words, you need to
install a new (and better) driver. First you need to go to the rt2x00
webpage (http://2x00.serialmonkey.com) and go to the download section.
There you look for one of the 2500-cvs-... drivers (tar) and download
it. Then you follow these steps... that did it for me. After restarting
the computer everything worked like a charm... internet connection at
startup !!! I just used the same configuration in
/etc/network/interfaces that I had in Ubuntu 6.06. Happily connected
with WPA that is supported by the driver (like I said before, forget
messing with wpa_supplicant, is a waste of time).

1. go to TERMINAL
2. go to directory where you downloaded the 2500-cvs...tar.gz
3. type: tar -xzf rt2500-cvs-daily.tar.gz
4. type: sudo apt-get install build-essential linux-headers-$(uname -r)
5. type: cd ./rt2500-cvs-*/Module
6. type: make
7. To test, type: sudo insmod rt2500.ko (all it does is telling me that it 
already exists)

Exit TERMINAL

1. Select: [System] – [Administration] – [Networking]
2. Find the wireless card, then Select  [Activate]

To finish up the install

1. go to TERMINAL
2. type: sudo ifdown ra0
3. type: sudo cp ~/rt2500-cvs-daily/Module/rt2500.ko /lib/modules/`uname 
-r`/kernel/drivers/net/wireless/
4. type: echo "alias ra0 rt2500" | sudo tee /etc/modprobe.d/rt2500

If you have similar success, feel free to post this on other boards or
leave feedback here to help out other frustrated users. May the Force be
with you :)

-- 
RaLink rt2500 wireless card not seeing networks in edgy
https://launchpad.net/bugs/64334

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