The module and firmware...
Yes, you do need both a kernel module for the chip in this device and the right firmware.
Newer versions of linux(newer kernel) may have the module build in, ready to be told to load with the command "modprobe", but may require that you also install the firmware. This may either be as a package from a repository, which may be the case for Ubuntu 12.04, or from a download from the chip maker(Ralink).
However you may have to download both the module and firmware from Ralink and compile everything yourself. If you need to download the firmware from Ralink, you may find a README or guide included that could help.
I can’t tell you exactly what to do. I use openSUSE, and the firmware was in a package after I added a repository.
When you have everything installed, you can use "lsmod" to see the loaded modules.
With a pci card that required a module and firmware, this is what is loaded for my wireless as an example.
rt2x00pci 14519 1 rt2800pci
rt2x00lib 54995 3 rt2800pci,rt2800lib,rt2x00pci
mac80211 555683 3 rt2800lib,rt2x00pci,rt2x00lib
cfg80211 208570 2 rt2x00lib,mac80211
Remember that after you configure the device, you must still set up and make the wireless connection.