i am running raspbmc and wanted to setup the wireless adapter into AP mode so i can use xbmc remote via my ipad / phone. But, of course, i'm having issues

I am trying to follow this:
http://elinux.org/RPI-Wireless-Hotspot
which suggests that i can use this chipset:
Ralink RT5370 DOES support Access Point
Here is my lsusb output:
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pi@raspbmc:~$ lsusb
Bus 001 Device 002: ID 0424:9512 Standard Microsystems Corp.
Bus 001 Device 001: ID 1d6b:0002 Linux Foundation 2.0 root hub
Bus 001 Device 003: ID 0424:ec00 Standard Microsystems Corp.
Bus 001 Device 004: ID 148f:5370 Ralink Technology, Corp. RT5370 Wireless Adapter
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pi@raspbmc:~$ iw list
Wiphy phy0
<chopped>
Supported Ciphers:
* WEP40 (00-0f-ac:1)
* WEP104 (00-0f-ac:5)
* TKIP (00-0f-ac:2)
* CCMP (00-0f-ac:4)
Available Antennas: TX 0 RX 0
Supported interface modes:
* IBSS
* managed
* AP
* AP/VLAN
* WDS
* monitor
* mesh point
software interface modes (can always be added):
* AP/VLAN
* monitor
interface combinations are not supported
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pi@raspbmc:~$ iwconfig
wlan0 IEEE 802.11bgn ESSID:off/any
Mode:Managed Access Point: Not-Associated Tx-Power=20 dBm
Retry long limit:7 RTS thr:off Fragment thr:off
Power Management:on
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pi@raspbmc:~$ sudo iwconfig wlan0 mode master
Error for wireless request "Set Mode" (8B06) :
SET failed on device wlan0 ; Invalid argument.
#1 - i'm assuming i need to be in master mode for my pi to broadcast in AP mode?
#2 - any ideas why i cant set it? googleing that error shows up piles of stuff which doesnt look like it is relevant

#3 - do i need to change "driver=nl80211" to anything else that might be an ralink driver? any ideas what?