Well the USB Stick is a problem in the first place since these things are even tinier than PCMCIA cards and therefore have close to no antenna inside of them. That doesn't really help your reception, but that wasn't your question either.
First of all, USB 1.1 has 11MBit/s so you should be fine with either USB 2.0 or 1.1.
About the signal strength, I bet you are using the tool that came with your WiFi Dongle to tell you your signal quality. I suggest using netstumbler, just to check the actual signal strength. You should notice that your signal is much weaker when you get 1MBit/sec compared to the spot where you get 11Mbit/sec. If that is not the case there's something wrong
Hope that helped ya out.