I'm also using hidden WPA2 protected network, without any issuses with new (or any old) version of selector applet.

Anyway, when connection dialog pops up, selector applet consider job done, and rest is for maemo connectivity parts, i.e. its most likely that it's not selector fault. Personally, i think that Your drivers may not be loaded properly (something stop the from loading like they should) - can You provide more debug info on this? Maybe it could be used to upgrade selector applet "detection" mechanism (i.e. when it should output "drivers loaded", and when kick off errors).

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Version 0.2.1-2 installed and tested, of course no errors (having in mind that only thing changed was package description, no surprise here, huh? ) When it will make it's way into -testing, I'll happily vote.

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If by modified osso-wlan package You mean that one by lxp (bleeding edge drivers creator) I'm NOT using it ATM - may be worth to mention. As i said, for me everything is working fine.