I have the atmelwlan drivers for my wireless card (a linksys WUSB11 (I think just the USB version of what you have)) but the drivers support pcmcia too. Why not give them a try? They follow the more usual 'make config', 'make install' way of doing things.
If you want to carry on with the way you're doing it then you have two options:
1. Move the tar file into /usr/src
- cd into /usr/src and run 'tar xvf filename.tar'
- that will untar the tarball
2. cd into /usr/src, but don't move the file
- run 'tar xvf /path/to/filename.tar' (replacing that with the path to your tarball)