tried the new kernel - no joy.  Speed is still under 1Mb/s and is intermittent. 
 Still getting 
[  253.960053] phy0 -> rt2500pci_set_device_state: Error - Device failed to 
enter state 1 (-16).
[  265.540055] phy0 -> rt2500pci_set_device_state: Error - Device failed to 
enter state 1 (-16).

messages being reported in the kernel log.

-- 
rt2500pci wireless regression in lucid
https://bugs.launchpad.net/bugs/539794
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