OK, for those of you that followed this thread all the way down to here
looking for how to fix the problem...

Here is how I fixed it.

I created a new file called /etc/modprobe.d/blacklist-rt2500usb.conf with the 
following content
------------------------------------------------
# For whatever reason, the rt2500usb and rt73usb drivers are both
# getting loaded.  To stop this situation, stop the rt2500usb driver
# from loading (Ubuntu: #396417)
blacklist rt2500usb
------------------------------------------------

All is well on reboot

Thanks for the help guys

-- 
Edimax Wireless USB Dongle Failure Karmic Kernel 2.6.31-X
https://bugs.launchpad.net/bugs/396417
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