First of all, from my experience, raspberry needs to be powered by an ( at least ) 1A power source for the dongle to work as expected.

No drivers needed if your using RC4/Rc5. Since its a realtek chipset you can update the firmware drivers by typing:

sudo apt-get install -y firmware-realtek

Prepare your raspbmc by installing some helper packages:

sudo apt-get install -y wireless-tools wpasupplicant

Raspbmc uses NetworkManager to manage all your connections, the easiest way i found to configure the dongle was:

• Install the Network-Manager XMBC plugin
• Go to main menu and enter “Programs”
• Start Network-Manager program
• Select your network

Since i have a strange setup on my router this didn’t work ( authentication with the AP failed ) so, here is an alternate manual method:

Create a file a new file called /etc/NetworkManager/system-connections/Wireless

Paste the following as content of the new file

[connection]
id=Wireless
uuid=de997907-591e-11e2-8e39-359453556e75
type=802-11-wireless

[802-11-wireless]
ssid="YOUR NETWORK SSID"
security=802-11-wireless-security

[802-11-wireless-security]
key-mgmt=none
wep-key0="YOUR WEP ASCCI PASSPHRASE"

[ipv4]
method=auto

[ipv6]
method=ignore

Edit according to your wireless network setup, you can find settings reference here: http://projects.gnome.org/NetworkManager/developers/settings-spec-08.html

Important: the uuid setting must be unique amongst all your connections, choose an unused one

Restart your raspberry and then:

$ tail -F /var/log/syslog

Check if the interface is connecting.

If its failling just edit the config file ( /etc/NetworkManager/system-connections/Wireless ) and adjust your connection settings. As soon as you save the file NetworkManager will update the connection and tries to reconnect.