Same issue here on 32 bit.

There is a connection for a while, from what I've found; I can ping my
router and get a response, and even load a few web pages. However, it's
very very slow. (NM Applet says the network speed is 1mb/s).

A bit of struggling later, it loses connection completely and, as you've
observed, NM Applet still claims to be connected. (I can then
disconnect, reconnect and repeat the horrible process, or restart with
the old kernel).

-- 
Inte Pro/Wireless 4965 AG or AGN stopped working in kernel 2.6.32-17
https://bugs.launchpad.net/bugs/545708
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