Wireless disconnects when laptop unplugged from power source

The Power Manager is invoked when you switch to battery. /usr/lib/pm-utils/power.d/wireless (part of the pm-utils package) is what caused the same problem for me (Dell D630). I looked through the files in dpkg -L pm-utils, read man pm-powersave and found that I could disable the "feature" by creating /usr/lib/pm-utils/power.d/wireless.

So to fix this, open a terminal (Ctrl+Alt+T) and type:

sudo touch /usr/lib/pm-utils/power.d/wireless