you either need to get new versions of madwifi, or fix the stuff you got
i have a atheros based card, Dlink DWL-G650 and i have used airsnort and got it to work
iwconfig ath0 mode monitor = Monitor mode
iwconfig ath0 mode monitor = Normal mode (put to this to use as normal, or to use kismet)
update your drivers and try it again, i ran that and now i'm in monitor mode....
Ok, a bit of a hint, i had to do some funny things to get airsnort to pick up my AP
First, you need the card to have a ssid assosiated with it, it doesn't have to be connected, just associated with something. Mine would not work if i didn't have a ssid associated with it.... no clue why....
so type: #iwconfig ath0 essid eggnog (or whatever ssid you want it)
start up airsnort
select ath0 as the network device
and "other" as driver type
select either scan or channel and hit start, it will start picking up packets.
ps. make sure you have a wep enabled ap in range