I today updated to lucid lynx beta and had this issue. I managed to fix
it by compiling the latest driver as others have described above,
however I also had to copy the new driver from the directory that make
install put it in to the
/lib/modules/2.6.*/kernel/drivers/staging/rt2860 directory. After a
reboot it is connecting over WPA2 at 270Mb/s (apparently)

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[lucid] rt2860 frequently fails to connect to mixed mode WPA/WPA2 secured 
wireless networks
https://bugs.launchpad.net/bugs/496093
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