This might be the same problem that I am getting. I am using Karmic Netbook 
Remix on an Eee PC901.
It does connect to the wifi but it slowly degrades and thus downloads get 
painfully slow. Starts on full bars, then it might jump to 2 bars, then back to 
full...but eventually it drops to nothing and then disconnects. I then can't 
reconnect unless I reboot. I can however run the 'radar scan' application, 
which displays local networks that can be received, and it picks up my network 
and other networks in my area. I can, in the same position in my house, always 
get a good signal on my Nokia N95 (wifi).
So, I think that this is a software problem especially as, previously, I used a 
modified set up of Ubuntu 8.04 on this computer and the wireless worked just 
fine.

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[Karmic] wireless connection keeps dropping - WPA TKIP
https://bugs.launchpad.net/bugs/481432
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