A further thought on the situation:

4.  Signal strength does make a difference here.
     At  -69 to -67 dbm or three bars on the network manager icon, my broadband 
works works very well;
     At  -73 or -72 dbm or two bars, my broadband is noticeably poorer; and 
     At  -75 dbm my broadband gives up. 

I have the feeling the latest kernel may have much improved the SNR
situation for the rt2500 hardware.  In my case my broadband performance
with Linux is now on a par with that of XP.

I get my dbms from iwconfig and my broadband test from SpeedTest.net.  I
get my broadband from Verizon FiOS, usually at about 15Mbps.

-- 
rt2500pci wireless regression in lucid
https://bugs.launchpad.net/bugs/539794
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