After spending weeks researching and days trying to implement it, success may not be too far away after all. This morning, on my VM, I was able to finally get to the login screen. I couldn't login, though. However, that may not be such a big issue. I've had similar issue with a regular LTSP client setup and probably a server restart can fix that. I was also able to load the LTSP client on my Fujitsu Stylistic 3500 tablet till the login screen as well. That was very exciting.
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Update: Got past the authentication after restarting server and nbd-server service. I get authenticated but yet to see the desktop. So far, so good.
Update: Seems like I get stuck here and can not proceed any further. However, my VM works fine. I'll try changing certain settings to see if that helps.
Update: I'll continue researching this, however, not as aggressively any more. There are so many other things to try and I've only now begun the LTSP experience.
Here is a picture.
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Progress on this topic can be followed on the following pages:
Unfinished business: Ubuntu LTSP over Wifi
Ubuntu LTSP over Wifi (Continued)
Ubuntu LTSP over WIFI - TP-LINK TL-WN422G
Ubuntu LTSP over WIFI - TP-LINK TL-WN422G - Update
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Update: Got past the authentication after restarting server and nbd-server service. I get authenticated but yet to see the desktop. So far, so good.
Update: Seems like I get stuck here and can not proceed any further. However, my VM works fine. I'll try changing certain settings to see if that helps.
Update: I'll continue researching this, however, not as aggressively any more. There are so many other things to try and I've only now begun the LTSP experience.
Here is a picture.

Progress on this topic can be followed on the following pages:
Unfinished business: Ubuntu LTSP over Wifi
Ubuntu LTSP over Wifi (Continued)
Ubuntu LTSP over WIFI - TP-LINK TL-WN422G
Ubuntu LTSP over WIFI - TP-LINK TL-WN422G - Update