I have an IBM t40 which has a Cisco Wireless LAN Mini PCI card 802.11b with current drivers from ibm (v3.8 from 2004). In its present condition, I cannot connect to my friends WPA2 encrypted router. It is possible for me to connect to WPA2 routers, either by upgrading the Cisco driver or some other program, or will that require that I upgrade the actual network adapter. Any help would be appreciated. If anyone has tried, please tell me about your experiences.

That wireless adapter will never support WPA2/AES. You need to get another wireless adapter if you want to use WPA2.

Just to follow up on this for any guys directed here by google.
That card, Cisco 11b actually supports WPA/WPA2. You need to install the cisco software from ibm drivers webpage, choose custom installation and install only all security modules.
Reboot and use windows manager. All connects fine to my virginmedia superhub on WPA2.
Any other software installed and it did not work for me.

One thing to look out for: modern routers don't always transmit wifi-B anymore, without specifically changing the settings!