I get that "Error for wireless request "Set Encode" (8B2A)" message all the time on one of my wireless cards. It simply means that the WEP key is wrong. I probably get it because I'm not using WEP. I'm using WPA. But, it does not prevent me from getting a connection. Otherwise, I would not be able to ping my router at 192.168.1.1.
[root@PentiumIII ~]# service -f network
Shutting down interface wlan0: [ OK ]
Shutting down loopback interface: [ OK ]
Bringing up loopback interface: [ OK ]
Configuring wireless regulatory domain [ OK ]
Bringing up interface wlan0: Error for wireless request "Set Encode" (8B2A) :
SET failed on device wlan0 ; Invalid argument.
[ OK ]
[root@PentiumIII ~]# ping 192.168.1.1 -c 5
PING 192.168.1.1 (192.168.1.1) 56(84) bytes of data.
64 bytes from 192.168.1.1: icmp_req=1 ttl=64 time=26.0 ms
64 bytes from 192.168.1.1: icmp_req=2 ttl=64 time=9.48 ms
64 bytes from 192.168.1.1: icmp_req=3 ttl=64 time=9.35 ms
64 bytes from 192.168.1.1: icmp_req=4 ttl=64 time=18.0 ms
64 bytes from 192.168.1.1: icmp_req=5 ttl=64 time=9.45 ms
--- 192.168.1.1 ping statistics ---
5 packets transmitted, 5 received, 0% packet loss, time 4003ms
rtt min/avg/max/mdev = 9.356/14.484/26.052/6.685 ms
What bothers me about your post is that you say you have a wireless connection. But, you're showing two ethernet connections, eth0 and eth1. Open PCC. Go to Network & Internet in the left pane and Network Center in the right pane. How many network connections are showing there?