I posted this to networkmanager list and here is what I got from the developers


These logs indicate a problem with knetworkmanager where it is not
correctly setting up the connection profile after you hit connect.  I'd
suggest seeing if the knetworkmanager team has any ideas about this
failure.

Some information for them:  NM expects to be passed either (1) all the
secrets from the requested setting, or (2) an entire, valid Connection
dict, as the response to a GetSecrets call.  It looks like
knetworkmanager is trying to do #2 here, but the connection object
simply isn't validating and thus the connection fails.

(In reply to comment #0)
> Version:           0.9-0.3.20090930svn (using KDE 4.3.5)
> OS:                Linux
> Installed from:    Fedora RPMs
> 
> I am using Knetworkmanager (knetworkmanager-0.9-0.3.20090930svn.fc12.2.x86_64)
> and networkmanager (NetworkManager-0.7.997-2.git20091214.fc12.x86_64) and I ma
> having problem accessing a hidden SSID which uses LEAP. Below is the lines in
> messages:
> 
> NetworkManager: <WARN>  wait_for_connection_expired(): Connection (2)
> /org/freedesktop/NetworkManagerSettings/2 failed to activate (timeout): (0)
> Connection was not provided by any settings service
> NetworkManager: <WARN>  wait_for_connection_expired(): Connection (2)
> /org/freedesktop/NetworkManagerSettings/2 failed to activate (timeout): (0)
> Connection was not provided by any settings service
> NetworkManager: <WARN>  wait_for_connection_expired(): Connection (2)
> /org/freedesktop/NetworkManagerSettings/2 failed to activate (timeout): (0)
> Connection was not provided by any settings service
> 
> NetworkManager: <info>  Activation (wlan0) starting connection 'AP'
> NetworkManager: <info>  (wlan0): device state change: 3 -> 4 (reason 0)
> NetworkManager: <info>  Activation (wlan0) Stage 1 of 5 (Device Prepare)
> scheduled...
>  NetworkManager: <info>  Activation (wlan0) Stage 1 of 5 (Device Prepare)
> started...
> NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure)
> scheduled...
> NetworkManager: <info>  Activation (wlan0) Stage 1 of 5 (Device Prepare)
> complete.
> NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure)
> starting...
> NetworkManager: <info>  (wlan0): device state change: 4 -> 5 (reason 0)
> NetworkManager: <info>  Activation (wlan0/wireless): access point 'IBM' has
> security, but secrets are required.
> NetworkManager: <info>  (wlan0): device state change: 5 -> 6 (reason 0)
> NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure)
> complete.
> NetworkManager: <WARN>  secrets_update_setting(): Failed to update connection
> secrets: 1 ipv4
> NetworkManager: <WARN>  secrets_update_setting(): Failed to update connection
> secrets: 1 802-1x
> NetworkManager: <info>  Activation (wlan0) Stage 1 of 5 (Device Prepare)
> scheduled...
> NetworkManager: <info>  Activation (wlan0) Stage 1 of 5 (Device Prepare)
> started...
> NetworkManager: <info>  (wlan0): device state change: 6 -> 4 (reason 0)
> NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure)
> scheduled...
> NetworkManager: <info>  Activation (wlan0) Stage 1 of 5 (Device Prepare)
> complete.
> NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure)
> starting...
> NetworkManager: <info>  (wlan0): device state change: 4 -> 5 (reason 0)
> NetworkManager: <info>  Activation (wlan0/wireless): connection 'AP' has
> security, and secrets exist.  No new secrets needed.
> NetworkManager: <info>  Config: added 'ssid' value 'AP'
> NetworkManager: <info>  Config: added 'scan_ssid' value '1'
> NetworkManager: <info>  Config: added 'key_mgmt' value 'IEEE8021X'
> NetworkManager: <info>  Config: added 'auth_alg' value 'LEAP'
> NetworkManager: <info>  Config: added 'identity' value 'user@domain'
> NetworkManager: <info>  Config: added 'password' value '<omitted>'
> NetworkManager: <info>  Config: added 'eap' value 'LEAP'
> NetworkManager: <info>  Activation (wlan0) Stage 2 of 5 (Device Configure)
> complete.
> NetworkManager: <info>  Config: set interface ap_scan to 1
> NetworkManager: <info>  (wlan0): supplicant connection state:  inactive ->
> scanning
> NetworkManager: <info>  (wlan0): supplicant connection state:  scanning ->
> associating
> NetworkManager: <info>  (wlan0): supplicant connection state:  associating ->
> disconnected
> NetworkManager: <info>  (wlan0): supplicant connection state:  disconnected ->
> scanning
> NetworkManager: <info>  wlan0: link timed out.
> NetworkManager: <info>  (wlan0): supplicant connection state:  scanning ->
> disconnected
> NetworkManager: <info>  (wlan0): supplicant connection state:  disconnected ->
> scanning
> NetworkManager: <info>  (wlan0): supplicant connection state:  scanning ->
> associating
> NetworkManager: <info>  (wlan0): supplicant connection state:  associating ->
> disconnected
> NetworkManager: <info>  Activation (wlan0/wireless): association took too long.
> NetworkManager: <info>  (wlan0): device state change: 5 -> 6 (reason 0)
> NetworkManager: <info>  Activation (wlan0/wireless): asking for new secrets
> 
> and it prompts for username/password again
> 
> Actually this also happens when I try to use my Nokia E71

I can confirm this bug.
I have the same problem, I can't creating a hidden wifi connection.
A workaround is run this command before creating the connection in NM:
iwlist wlan0 scan essid myessidname

I think this is a huge bug, I hope the bug can be fixed.

*** This bug has been marked as a duplicate of bug 209464 ***