Sorry about the long delay. I have several things to report on my findings. First of all, I wish to second this statement.
The ones from Ralink's site are crap
The last few days, I have been working intensively on trying to make the stupid Ralink drivers work. I changed the modprobe.conf, I changed the ifplugd.conf, I tried to learn how wifi-radar works with profiles, I tried to learn how VL works with profiles through VASM (btw, I found a strange bug with VASM in the wireless profile configuration on which I wish to elaborate a little bit later), I tried manually loading the access point information needed to connect to it using the old school method of iwconfig (another weird bug occurred here which I will discuss later), I tried looking into the rc.inet1 and rc.wireless scripts to see if I couldn't change a few things to make it work... etc. In the end, I failed miserably. Although the ralink module was loaded, and the ra0 interface was up, I could not consistently connect to the access point. I say "consistently" because on 2 or 3 occasions, it worked. But I never figured out what I did to connect. I wasn't able to reproduce the feat every time. So I will conclude that either the drivers were somehow faulty and worked randomly (if this is the case, Ralink is sadistic towards their customers), or the entire networking scheme in VL was corrupted and unable to correctly use the rt61 module as it was suppose to. The latter is unlikely so I'm leaning towards the former.
Now on to the two weird bugs I encountered. Let me begin with the VASM profile bug. My particular access point is configured with a WEP security encryption. Now when a profile is edited in VASM, as expected, it let's you choose the type of encryption the particular connection will be facing. And since WEP is very common, this choice is offered. Now here's the strange part. Every time I would want to look at the profile configuration I created, the security scheme would magically change to WPA. So I would change it back to WEP and save and then load it again.... and BAM, back to WPA again. Now I tried to go in the text file in the /etc/wireless/ folder and edit the "myessid".essid.conf file and manually change the encryption to WEP, it didn't matter. VASM would change it back to WPA automatically. I don't know if it's suppose to do that, or if this consists of a bug, but it really was a personal annoyance.
The second bug I wish to discuss is the functionality of iwconfig. From the brilliant wireless card HOWTO written by easuter, I learned that you're suppose to be able to manually enter the connection information using this command. Since I was having a hard time with the "James Bond" gui tools, I figured I'd give the good old tried and true command line method a try. Well, I was surprised to find out that entering commands such as
iwconfig ra0 essid "myessid"
iwconfig ra0 key XXXXXXXXXXXXXXXXblablabla
seemed to have no effect whatsoever. I would type in iwconfig ra0, and the fields all remained blank (except for the "Nick" field which contained the essid of my access point). The "essid", "key" etc, all remained blank. I was truly puzzled. So I pop the manual for iwconfig, and eventually learn that iwconfig can be configured to operate in two ways. One way is some type of ESSID promiscuous mode that's designed to connect to any access point available. This is probably useful for laptops which are constantly on the go. The second mode is one where you specify an access point, and you computer will be configured to connect to only that particular one. So I figure that if iwconfig is currently configured in promiscuous mode, that might be the reason it's not saving the essid information I'm feeding it. So I use the following command to enable the ESSID checking.
iwconfig ra0 essid on
Then after pressing "enter", the unthinkable occurred. A massive crash of the system which reboots my computer immediately. We are talking about a complete bypass of the init 6 run level, directly to the bios diagnostics screen. I thought I'd mention this as a pretty significant bug.
All in all, I continued to work on the problem a little bit more until I got completely fed up, and decided to reinstall the system. I then followed the advice of easuter using the serialmonkey drivers and boy is that a different game. We are talking about 2-3 minutes from download to having the module loaded on the kernel. Then I crossed my fingers and popped wifi-radar up to connect to a the access point. After entering all the appropriate information, I clicked on connect, and then I nearly cried. It was so beautiful. A working connection on the first try. No gimmicks, no problems... zip... none. Well, I must congratulate the guys at serialmonkey. They did a magnificent job with the driver. It just works. Here, let me say it again. It just works. So for all you people who are using the rt61 chipset, there is hope, and it's called the rt2x00 project. Don't bother with Ralink drivers. They are coded even more poorly than Winblows. I wish to thank easuter for directing me towards those drivers. I love you man.... ok not really, but you still rock. Awesome job with VL, you've made me a believer!