Edit [05Oct2012]: If you need help with this USB Stick on Mountain Lion please check my new post on this subject.

Just a quick post to help anyone else out there with the same problem.

After upgrading from Snow Leopard to Lion I was not able to connect to the internet using my Huawei E1550 USB Stick because the device was not recognized.

I am not exactly sure why, but all I needed was to download and install the new driver you can find here. It seems this driver will suit other Huawei models too.

I started here but for me updating only the driver did the trick, so no need to go through all the steps described.