Have also had the Insufficient Privileges problem in Karmic. The work around 
solution above from 'one.lone.patriot' also worked for me. Network Manager is 
now operating as expected and Mobile Broadband connections with an E220 are 
fine.
For the record, other symptoms were:
1. If auto connect failed on start up, I could work thru the Insufficient 
Privileges problem, but only once. When I did that I found that NM always 
recorded that 'Last Time Used" for the connection was 'never' (even though I 
had been able to get a connection every day), and the password field was blank. 
After inserting my password and retrying, I would usually get a connection.
2.  If a working connection to the internet was broken, I was unable to 
reconnect and the Insufficient Privileges error would not allow me to Edit 
Connections. Only solution was to restart the computer.

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NetworkManager won't allow user to edit settings of Mobile Broadband connection
https://bugs.launchpad.net/bugs/456261
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