I have given the daily lucid 64 bit iso 20100109 some more testing via grub2 
loopback. The wireless connection with rt2860sta WEP worked immediately and 
reliably. Specifically I did:
disconnect and reconnect 9 times
shutdown and reboot 2 times
sleep and resume 2 times
there was 1 involuntary disconnect with immediate automatic reconnect
total time connected now something like 5 hours

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[lucid] rt2860 frequently fails to connect to secured wireless networks
https://bugs.launchpad.net/bugs/496093
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