Connect to an Access Point using IWCONFIG Are you trying to connect to an access point which is advertising wpa-psk/wpa2-psk? If you trying to use a wep passphrase, try doing it with your interface down.
alt-d alt-f etc. stops working in my xterm well not sure whats resetting the settings, you can do a ctrl+leftclick and see if "Meta Sends Escape" is ticked or not, if it happens again