Quite annoyingly the KDE 4.x Network Manager *requires* the KDE Wallet to be enabled to store passwords for secure networks (WEP/WPA).
If KDE Wallet is enabled - then it requires a password... so you login, and are immediately prompted for KDE Wallet password.
The only way I found to get around this is to set the KDE wallet password to be blank.
Click on KDE Wallet in tray, click kdewallet, goto File -> Change Password, and leave both blank.
IF a system is set to autologin, then I can understand the whole KDE wallet idea - but for users explicitly logging in with a password, KDE Wallet should be accessed transparently.