Finally I got it working with ubuntu 12.10. Here is what I have tried:
1. Installed rev5 image. Couldn't do opkg update. Got lots of errors saying invalid URL.
2. Installed rev6 image without opkg upgrade since I suspect there might be some recent changes that may break the wifi connectivity. It looks better at the beginning, I was able to get the wifi dongle recognized, also make wlan0 interface available. However it was never able to acquire an IP address, iwlist scan also returned nothing.
3. Installed ubuntu 12.10 image from http://rcn-ee.net/deb/rootfs/quantal/ubuntu-12.10-r2-minimal-armhf-2012-11-29.tar.xz
and replace the wifi dongle with Linksys WUSB100. Compared to Angstrom, Ubuntu seems to be much stable. Configuring wifi tooks a lot less effort. The dongle worked right out of box and with minimal set up (ifconfig, ifup, ..., etc). It was able to acquire an IP address fairly quickly.
Hopefully this can help someone who's like me struggling to get wifi working on the beaglebone.