Please re-test with the latest NM and -applet updates:
network-manager 0.8~a~git.20091005t192303.1d28ad1-0ubuntu2
network-manager-gnome 0.8~a~git.20091002t194214.8515a07-0ubuntu1
** Changed in: network-manager-applet (Ubuntu)
Status: New => Incomplete
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Network Manger Does Not Allow DNS entries/ Crashes
https://bugs.launchpad.net/bugs/444068
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