After reading all the pages on Thinkwiki and number of others how to install Madwifi driver for Atheros AR242x 802.11abg Wireless card on our Lenovo Thinkpad X61 and trying even ndiswrapper I finally stumbled upon the solution. Apparently this particular card has an unsupported chipset. But it can be made to work by following these steps:
Go to a directory where you keep sources of packages (e.g. ~/src)
$ cd ~/src
$ svn co http://svn.madwifi.org/madwifi/branches/madwifi-hal-0.10.5.6
$ cd madwifi-hal-0.10.5.6
$ cd scripts/
$ sudo ./madwifi-unload
$ sudo ./find-madwifi-modules.sh $(uname -r)
$ cd ..
$ sudo make install
$ modprobe ath_pci
You might be able to see the wireless interface at this moment:
$ ifconfig -a
It is also important to blacklist ath5k module:
$ sudo echo "blacklist ath5k" >> /etc/modprobe.d/blacklist
If not you need to reboot. That worked for me.