First things...

"Create new wireless network..." creates an adhoc network which means a
network without an access point.  Your computer in essence creates the
new network, and other computers can join in.  Since there's no access
point involved, DCHP cannot be used for adhoc.   I would recommend that
you use "Edit Connections" and delete all of the networks that you find
and start over.

That said, looking at your Syslog.txt file, it looks like this is an
ipw2200 driver problem.  Whenever you attempt to connnect to your access
point, the card tries to associate, and then continually disconnects.

Can you connect to any other access points ( ie. open or WEP )?

There were recent kernel changes to Jaunty/9.04 with regards to the
ipw2200 module and the associated crypto modules, I'll check with the
kernel team to see whether this problem exists under Karmic.

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can't connect to a WPA encrypted network
https://bugs.launchpad.net/bugs/406726
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