I'm having this problem too and I have the same network card. I just
upgraded from 7.10 to 8.04 and now Network-Manager won't connect to my
wireless router (with WPA2 encryption) anymore. It just tries forever.
However, the network is shown to exist in Network-Manager.

If I issue the "sudo iwlist scan" command to scan for my network, it
also acts strangely. The scan stops for a long while at eth1 (my
wireless interface) and then most of the time it says "No scan results".
Only at rare occasions, it shows my network although the router is very
close to the computer and I know the signal strength is good.

What a pity this is. Wireless networking has worked fine for me in 6.10,
7.04 and 7.10 and now when I update to 8.04 LTS that I had intended to
stay with for a few years, it doesn't work anymore.

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hardy alpha2 PRO/Wireless 3945ABG does not work
https://bugs.launchpad.net/bugs/178530
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