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@idollar: That is exactly what is causing my problems. Thanks enormously!
@ryran: The Wifi "searching" icon did appear briefly in my panel, but i didn't realise that it was meaning the USB network.
For anyone else having problems with their usbNetwork crashing, hanging, locking up, etc and is running Ubuntu or another GNOME based Linux distro, the solution is to configure it via Network Manager instead of ifconfig. Set for manual configuration (instead of DHCP), the address to 192.168.2.1, netmask to 255.255.255.0 and gateway to 0.0.0.0. Leave the DNS settings blank.
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