I am using KTorrent 2.0.1 on Ubuntu 6.06 LTS, and have been having connection problems since I reformatted.

I see a good number of peers in the swarm, but can't connect to most of them. It seems to decline over time as well. Atm, on one of the torrents I have active, there are 241 leechers and 104 seeders in the swarm, but I am connected to 1 leecher and 1 seeder.

The most connections of any torrent I have active is 5. This is after about 4 hours of uptime, so enough time to work through queues etc, though that shouldn't affect this particularly. Upload is set at 20 kB/s in 4 slots atm.

Can you post the log file after a 15 minute download where you are not getting much peers ?

The log file can be found here :
~/.kde/share/apps/ktorrent/log

Also, have you tried with version 2.0.2 ?