This dinky little USB Wi-Fi adapter seems like a good match for the Raspberry Pi, it seems silly to have a huge dongle sticking out of something so small and this little thing really is tiny, it’s only £10 including delivery on eBay too and will work on the Pi without a powered hub.
I checked the list on the excellent eLinux wiki to see if it was known to work on the Pi and there was even a link to a handy guide to setting it up, it’s all pretty straightforward except that the standard rtl8192cu kernel driver doesn’t work, the guide included a download for one that did but it was only a binary for the 3.1.9 kernel that the Raspberry Pi Debian image uses out of the box and as I’m using this 3.2.18+ kernel with I2C support it was no good to me and there was no link to the source so I could build my own.
I tried the one on the Edimax website which was the same as the version on the CD included with the dongle but it was too old and wouldn’t compile against a 3.2 kernel. After a bit of searching I found a newer one for a different adapter using the same chipset and that worked with only a couple of tiny modifications.
I’ve uploaded the source here in case anyone else finds themselves in the same situation, it cross compiles fine with: make ARCH=arm CROSS_COMPILE=arm-linux-gnueabi- KSRC=/path/to/kernel/source KVER=kernel version and you can then follow the above guide for the rest.