Confirmed. I use CNet Wireless-G PCI 54 Mbps 802.11g, WPA/AES/WPA2 which
is rt2500 based. Networks are detected in network-manager, and I am able
to connect to non-encrypted networks. However, connecting to encrypted
networks freezes the computer totally (hard reboot is the only option,
ctrl+alt+backspace does nothing). Seems not to be a network-manager bug,
this also happens when using the old method of connecting to the
network, using "network" in the system->administration menu. a sudo ifup
wlan0 freezes the computer in the same manner.

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Ralink Wireless legacy drivers (rt2500 rt61 rt73 rt2570) USB/PCMCIA/PCI hangs PC
https://bugs.launchpad.net/bugs/34902
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