I have the same wifi dongle, on Karmic, here's a quick workaround :

sudo iwconfig wlan0 rate 54M
sudo /etc/init.d/networking restart

if this works out, you can force this settings in
/etc/network/interfaces :

iface wlan0 inet dhcp
wireless-key (...)
wireless-essid (...)
wireless-rate 54M

-- 
Problems with ZyDAS wi-fi dongle
https://bugs.launchpad.net/bugs/478478
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