In TCP window scaling and broken routers posted in July of 2004, LWN.net's corbet points out that certain routers are setting the RFC 1323 window scale to 0. This effectively sets the TCP window size for the transmission to the minimum value and greatly inhibits performance. As corbet notes, Linux kernel developers have decided not to apply a band aid to the problem, and instead plan to force router manufacturers to fix their broken routers.
In case there are still broken routers floating around, it's worth noting that in recent versions of the Linux kernel, the window size can be controlled on a per host basis. See the comment by pcharlan for the necessary syntax.
If you should run across a router that is affecting your window scaling, you should immediately put pressure on the provider to remove the offending device.