with vanilla nm:
Feb 28 14:16:02 macbook NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure) complete.
Feb 28 14:16:02 macbook NetworkManager: <info>  Config: set interface ap_scan to 1
Feb 28 14:16:02 macbook NetworkManager: <info>  (wlan0) Supplicant interface state change: 2 -> 0
Feb 28 14:16:02 macbook NetworkManager: <info>  (wlan0) Supplicant interface state change: 0 -> 2
Feb 28 14:16:05 macbook NetworkManager: <info>  (wlan0) Supplicant interface state change: 2 -> 3
Feb 28 14:16:14 macbook NetworkManager: <info>  Activation (wlan0/wireless): disconnected during association, asking for new key.
Feb 28 14:16:14 macbook NetworkManager: <info>  (wlan0) Supplicant interface state change: 3 -> 0
Feb 28 14:16:18 macbook NetworkManager: <info>  (wlan0) Supplicant interface state change: 0 -> 2
Feb 28 14:16:20 macbook NetworkManager: <info>  (wlan0) Supplicant interface state change: 2 -> 0

after applying this patch
# cat rpms/networkmanager-madwifi.patch
--- src/supplicant-manager/nm-supplicant-interface.c.orig       2008-01-20 19:52:26.000000000 +0100
+++ src/supplicant-manager/nm-supplicant-interface.c    2008-01-20 19:52:50.000000000 +0100
@@ -767,7 +767,7 @@

                driver = g_new0 (GValue, 1);
                g_value_init (driver, G_TYPE_STRING);
-               g_value_set_string (driver, priv->is_wireless ? "wext" : "wired");
+               g_value_set_string (driver, priv->is_wireless ? "madwifi" : "wired");
                g_hash_table_insert (hash, "driver", driver);

                call = dbus_g_proxy_begin_call (proxy,

I am able to connect.