Sorry for the long story but here goes...
I spent quite a bit of time trying to get a USB wireless adapter that would work in AP mode for using with my low power ARM Sheevaplug at home, I consulted the tables on the Linux wireless site and went through the process of checking which would suit my needs. This seemed to be quite a task as manufacturers tend to change chipsets in wireless dongle models without changing the model codes and most don't support AP mode. I eventually settled for the Linksys WUSB54G which I thought would have a Intersil/Conexant chipset and be driven by the p54usb driver which can apparently do AP. On arrival the model version turned out to be different and it contained a Ralink chipset.
So I looked at the Linux wireless table and saw that the adapter could still be used in AP mode so I kept it and started trying to configure it.
From 2.6.30 to current 126.96.36.199 I have had nothing but problems with trying to get this to work. I have tried using the rt2x00 git tree just now and enabled some debugging options but I still have issues with the laptop not associating with hostapd, when it does I sometimes get no traffic either way.
Bus 001 Device 008 ID 13b1000d Linksys WUSB54G Wireless Adapter
After more digging around on the web for info I have managed to get this to work briefly by these steps
modprobe rt2500usb nohwcrypt=1
and before interface is brought up run
iwconfig wlan0 power off
after that i configured the interface with Gentoo configuration scripts and started hostapd.
The problem with this is, i'm not sure how to turn the power management off before the interface is brought up with Gentoo yet, it doesn't appear to let me change power management when the interface is running. Also CPU usage goes through the roof on this 1.2GHz ARM, maybe it is because the CPU doesn't have a hardware float unit, bandwidth is not too good either, I get around ~5Mbit/sec even when I am right next to the AP with my laptop.
So my question is really, has anyone gotten one of these to work reliably with hostapd? Can someone please shed some light on this or shall I just dump my Sheevaplug and get a Dreamplug instead, I'd like to be able to go outside this summer with the laptop rather than spend most of it messing around configuring
If any logs are needed please tell me specifically which bits and I'll be more than happy to post them or try anything else.
Many thanks for your time and efforts with the ralink drivers.
EDIT It seems this does kind of work without setting nohwcrypt in the module options but after transferring a certain amount of traffic (say 17 megabytes every time) to the laptop, I lose connection to the access point. I'm using WPA2 PSK in hostapd if this makes any difference.