First, update Ubuntu. You don’t need to upgrade your Ubuntu version, just use Update Manager to get your package updates before proceeding.
This should fix the problem as there is an existing bug against the kernel relating to this:
https://bugs.launchpad.net/ubuntu/+source/linux/+bug/624339
https://answers.launchpad.net/ubuntu/+source/gnome-nettool/+question/121473
Updating your packages should fix the problem. If the device works properly in 10.10 then it should also work in 10.04. If upgrading the packages does not fix the problem, please go the bug report page (the first of the two links I posted above) and click the “this bug affects me” button.
DO NOT attempt to use the drivers supplied by ASUS, they are stale, broken code. Even though it is an ASUS device, the chipset is a RaLink product and therefore the RaLink driver (rt2870sta) is the correct one to use. You should probably get rid of ndiswrapper too, unless you are using it for something else as well.
The rt2870 driver is in the kernel mainline and is installed in Ubuntu by default. The reason why the device is not automagically detected and the correct module loaded is that the ASUS device has a chipset ID which does not appear in the list of “aliases” that apply to the rt2870sta driver. This should be fixed in newer versions of the kernel. I can’t verify this myself since I applied a more complicated fix earlier. I can tell you that my USB-N13 still works.
If your kernel version > 2.6.32–28 (use uname -a to find this information) and the device does not work, I recommend burning a livecd of 10.10 and testing the device in that environment. Or you might consider just going ahead with the upgrade to 10.10 on your system. In any case, please let me know if the device does not function with the current kernel version.