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I am currently having the same issues here. I can get associated. with XP. I have tried every combination I can think of in the ACU and within the XP settings. What it currenlty looks like is that the Microsoft EAP and the Cisco ACU are incompatible. I don't know if it is the driver I would say no due to the fact that we associate. We are having a Cisco Engineer come out. If he can't come up with anything we are going to talk to microsoft. If any one at Cisco has ANY ideas I would appreciate it. That way we can save time and money.
I have my 340 card working with Cisco ACS and XP, Shouldnt be an issue you are using the ACU to setup the Client, I believe there is a setting in XP to not use XP to configure the wireless so a external program can take over. 2) The access point talks to the ACS server which can validate you against many different things including NT groups.... You have my email address Ill share whatever I know.
We have 350s in the building, and bradyrf's solution works great with XP. Just go into the LAN profile for WLAN and select the "Wireless Networks" tab (I think). Deselect the option at the top where is says something like "Allow XP to configure device". You can then install and run ACU to configure the card. Worked first time with me.