OK, I have been shown a work-around/fix on the forums. It seems that the
upgrade to 8.10 removed the 'network-administrator' tool from the 8.04
installation and installed a new version of NetworkManager. Perhaps this
new NetworkManager is thus intended to replace 'network-administrator'.
The problem is that the upgrade process leaves the old settings that
'network-administrator' created in place rather than importing them into
the new NetworkManager and the new NetworkManager is incompatible with
them, kind of leaving things locked up. The work-around/fix is to
manually edit '/etc/network/interfaces'  to remove any lines that
'network-administrator' may have created there. After that
NetworkManager will manage the interface.

If 'network-administrator' is going to be replaced with NetworkManager,
then perhaps the upgrade process needs to be fixed so that it doesn't
leave these old configuration settings behind but properly imports them
into NetworkManager instead.

-- 
Upgrade from Xubuntu 8.04 to 8.10 breaks network management and DHCP
https://bugs.launchpad.net/bugs/320336
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