The firmware has not been loaded. It's a non-free firmware, so its in an own directory with special license information.
You have to unsquashfs the ploplinux/lib.sqfs
change to squashfs-root/firmware/ipw2x00 and move all files one level up.
remove the old lib.sqfs
create a new lib.sqfs: mksquashfs squashfs-root lib.sqfs
Now 'iwconfig' should show a wlan0 and 'iwlist scan' should show the WLANs around you.
Regards
Elmar