I was able to figure this out after installing debian lenny.

Can confirm that is a  problem with rtl8180 that ships with 2.6.26
onwards and NetworkManager (currently running 0.6.6-2).

Dropping into runlevel 1 and doing /etc/init.d/network-manager start
causes the system to halt. If I do rmmod rtl8180 and then start network-
manager, then the system runs fine.

After modifying /etc/modprobe.d/blacklist and blacklisting rtl8180 and
then booting normally works and the wireless card works with
ndiswrapper.

Will download intrepid nightly to confirm that this is the issue.

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liveCD doesn't boot to gnome
https://bugs.launchpad.net/bugs/258073
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