I'm also getting this problem on a fully up to date Hardy beta install.
Additionally in the 'wireless networks' properties if I click 'show
password' it shows what looks like a hex representation, whereas it
should be showing a passphrase.
re-opening as it seems to have re-occurred.
** Changed in: network-manager (Ubuntu)
Status: Fix Released => Confirmed
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Network Manager does not remember WEP/WPA key
https://bugs.launchpad.net/bugs/36651
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