I had the same problem (bit rate locked to 1 Mbps) and then installed
linux-next compat-wireless release (from today, 2010-06-05) as suggested
in comment 3. This seems to fix the problem for me.

linux-backports-modules-wireless-karmic-generic version 2.6.31.22.35 did
not solve the problem though.

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