FYI. I also have this usb wifi radio. It works fine and displays
excellent receive sensitivity.

'lsusb'

Bus 001 Device 002: ID 148f:3070 Ralink Technology, Corp. RT2870/RT3070
Wireless Adapter

I use Ubuntu Release 12.04 (precise) 32-bit (up to date via Update
Manager earlier today) on an Intel Celeron board. I installed Linux
Kernel 3.4 a week ago but this ralink wifi radio worked fine on a fresh
install of Ubuntu 12.04, see below. I am writing this comment using it.

'uname -a'

Linux mac-8S651MP-RZ 3.4.0-030400-generic #201205210521 SMP Mon May 21
09:28:36 UTC 2012 i686 i686 i386 GNU/Linux

There is one odd thing, 'iwconfig' reports Tx-Power = 0 dBm,

wlan0     IEEE 802.11bgn  ESSID:"XxXxX"  
          Mode:Managed  Frequency:2.442 GHz  Access Point: 00:11:50:77:29:F4   
          Bit Rate=1 Mb/s   Tx-Power=0 dBm   
          Retry  long limit:7   RTS thr:off   Fragment thr:off
          Power Management:off
          Link Quality=45/70  Signal level=-65 dBm  
          Rx invalid nwid:0  Rx invalid crypt:0  Rx invalid frag:0
          Tx excessive retries:44  Invalid misc:62   Missed beacon:0

The AP "XxXxX" is security configured to use WPA2 encyrption only.

I booted a USB key on this PC with a fresh copy of Ubuntu 12.04
containing no updates since release. The ralink usb wifi radio works
fine out of the box accessing the same AP. I did not try WEP, WPA1/2
encryption and no encryption on the AP as there are other users present.

I hope this information is of use.

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https://bugs.launchpad.net/bugs/1009259

Title:
  Precise Regression: Kernel Driver for RT2870/RT3070 non-functional

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