This is still an issue in Ubuntu 11.10 (32 bit) with the most up to date
kernel provided through update manager:

Linux Damir-Ubuntu 3.0.0-16-generic-pae #28-Ubuntu SMP Fri Jan 27
19:24:01 UTC 2012 i686 athlon i386 GNU/Linux

I do not get transfer speeds faster than 7-8mb/s to a 8GB external USB
stick....I cannot believe this issue is so old and it hasn't been
addressed yet, this is a critical bug!!!

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https://bugs.launchpad.net/bugs/500069

Title:
  USB file transfer causes system freezes; ops take hours instead of
  minutes

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