This seems fixed in gutsy. I just tried the following:
rename ~/.gnome2/keyrings to ~/.gnome2/keyrings-0 and reboot.
Result: I get asked for the WEP authentication info and then asked to
create a keyring.
** Changed in: network-manager (Ubuntu)
Importance: Undecided => Low
Status: Confirmed => Fix Released
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unable to connect to WEP wireless if keyring does not exist
https://bugs.launchpad.net/bugs/82203
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