I have what seems to be the same issue.  I use the ipw2200 driver in
feisty.  knetworkmanager can not bring up a wep connection.  If I
disable knetworkmanager and run iwconfig and dhclient manually, the
connection comes up perfectly.

I got to this point in a threat on ubuntuforums here:
http://ubuntuforums.org/showthread.php?p=2637999

Please let me know if there is anymore information I can give.

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Wireless network interface (ipw2200) does not have IP address after boot
https://bugs.launchpad.net/bugs/34505
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