I have upgraded to Unbuntu 7.10.
I am using a cheap USB WIFI adapter.
I used ndiswrapper-utils, installed from the package manager. This utility allows the use of your windows drivers. I used the supplied windows 2000 driver.
I also tested my camera, and USB scanner, both items worked well.
I think many of the linux distros have come a long way. I would recommend trying a live CD of your favourite distro to check it out for yourself.
my $0.02