After a couple of tries, and reinstalling debian, I compiled the Ralink official (from their website) rt2500usb driver and wireless tools .28 without problems, and both seem to have installed correctly. typing iwconfig brings up :

lo : no wireless extensions
eth0 : ""
eth1 : ""
sit0 : ""
rausb0 RT2500USB WLAN ESSID:""
Mode:Managed Frequency=24.12 MHz Bit Rate=11 Mb/s
RTS thr:off Fragment thr:off
Encryption key:off
Link Quality=0/70 Signal level:-120 dBm Noise level:-82 dBm
Rx invalid nwid:0 Rx invalid crypt:0 Rx invalid frag:0
Tx excessive retries:0 Invalid misc:0 Missed beacon:0

However the light on the usb stick never comes on when I try scanning or setting up rausb0, and when I try and enter an essid with 'iwconfig rausb0 essid (my essid)' nothing happens (the essid in iwconfig stays the same). No matter what I do, it looks as if it's not communicating with the usb stick.

I'm not exactly sure what eth1 is as I only have one ethernet port on my box, but when linux boots it gives something similar to the message "eth1 : unknown device address 24", could that be linux dectecting the usb stick but not realizing it's usb? EDIT : I booted without the usb stick and the message still came up, so it's probably not that.

I'm using debian sarge, kernel 2.8.6-3-386, and the stick is a CNET wireless dongle (cwd-854d).