This rather interesting.
I ordered a Realtek 8192CUS from ChinaVasion (pico USB, so super small) in the hopes that I could just use an external WiFi adapter and forego the internal one I have. However after tinkering with it I causes my Ubuntu to not even boot even more (weird huh?).
So I reinstalled 64bit Ubuntu with updates, and now my internal WiFi works! I haven't had alot of time to play with it, but so far it has worked fine (even after suspend/resume). Maybe it's a kernel thing?
Current info for my setup with working RTL8192cfw:
Note, the following is with my phone basically five inches away, however before I couldn't get it to connect at all with any reliability:
wlan1 IEEE 802.11bgn ESSID:"AndroidTether"
Mode:Managed Frequency:2.437 GHz Access Point: 02:1A:11:F4:AA:15
Bit Rate=72.2 Mb/s Tx-Power=20 dBm
Retry long limit:7 RTS thr=2347 B Fragment thr:off
Link Quality=70/70 Signal level=-40 dBm
Rx invalid nwid:0 Rx invalid crypt:0 Rx invalid frag:0
Tx excessive retries:0 Invalid misc:2 Missed beacon:0
johnnyfive@beacon:~$ lspci -v
0d:00.0 Network controller: Realtek Semiconductor Co., Ltd. RTL8188CE 802.11b/g/n WiFi Adapter (rev 01)
Subsystem: Hewlett-Packard Company Device 1629
Flags: bus master, fast devsel, latency 0, IRQ 17
I/O ports at 3000 [size=256]
Memory at c4500000 (64-bit, non-prefetchable) [size=16K]
Capabilities: <access denied>
Kernel driver in use: rtl8192ce
Kernel modules: rtl8192ce
If there's anything I can do to help others please let me know.
johnnyfive@beacon:~$ uname -a
Linux beacon 3.2.0-30-generic #48-Ubuntu SMP Fri Aug 24 16:52:48 UTC 2012 x86_64 x86_64 x86_64 GNU/Linux
I will report back on reliability as well.
Best of luck!