Well, it definitely works now! I'm browsing the web through the two gumstix OLSR nodes I set up. I still think that the D-Link card was flaky and right now I'm using the Linksys WCF-11 Card. For the 2.6.18 kernel a small patch has to be added to linux/drivers/net/wireless/hostap/hostap_cs.c. Essentially, add PCMCIA_DEVICE_MANF_CARD(0x0274, 0x3301) to static struct pcmcia_device_id hostap_cs_ids. I created a patch to do it for that particular kernel if anyone's interested, but like I said, it's very easy.
Now, I have multiple topics to choose from for possible directions:
1. I could start writing the "brain" script in something like perl or as a shell script
2. I could start working on duty cycling with tiny nodes
I think I'm gonna get some hot chocolate first to celebrate and then talk with Deepak about the direction.
Last thing, to reduce packet loss I used the firmware TX rate control. You can set it with iwpriv iface txratectrl 1 (0 is to use driver's tx control). You can also find more information about the driver online: http://hostap.epitest.fi/cgi-bin/viewcvs.cgi/hostap/Attic/README.prism2?rev=HEAD