Before we talk about wifi, here is my take on some of your other questions:
A) All modern USB's are compatible, and 4GB is more than enough. (I booted 12.04 on 2GB). I think the application process might have been wrong though. What did you use to "burn" the iso image? I would/have used pendrivelinux. ( at http://www.pendrivelinux.com/ ) (I think that was the program, that was about a year ago for me.) Follow the instructions and you're good to go.
Now on to wifi
1) In my humble opinion, I would drop wifi radar, and let the wifi client in Unity (your default wifi client) work by itself. Wifi Radar's JOB is to find any and all wifi signals. (Which would explain the interference) Unity's wifi client is probably a bit more refined. (Windows is FAR more refined, explaining why this problem does not occur on 7).
So hopefully, Wifi radar is the problem as it's finding TOO MANY wifi signals, and not your OS/system.
And by the way, about that slow learning, 60 year old mind: you made ME Bing at least three things that you knew already. So, I don't think you get to claim that piece of grey matter as slow.
Have a good day. (Or night, whatever really. lol.)