1. Install the 2.6.34 kernel or newer from Kernel Mainline PPA.
2. Grab the latest RT2870 firmware from RALink's website.
3. Unzip the firmware download & copy the bin to /lib/firmware.
If using an older kernel, you can download the source driver from RALink & compile + install that: remember to copy in the newer firmware .bin file to its "common" subdirectory before installation (or copy to /lib/firmware afterwards).