[Asus  Eee Pad Transformer Prime] chrisfu:
You'll need to get the latest SuperSU su binary downloaded (attached) and push it to your device. You have a basic one there, but you will need the ChainFire one. Unzip it into the same dir as adb and then:

adb push su /data/local/tmp

It should complete successfully. Before doing anything at all in adb shell, you need to run the following:

adb shell
su

Your prompt should change to a #. You're now root.

Then, you need to remount /system as rw instead of ro (read-write instead of read-only):

/system/bin/toolbox mount -o rw,remount /system

Now, you need to clean up /system/xbin. First, list all the files in /system/xbin by doing this:

/system/xbin/busybox ls -l /system/xbin

Notice all the symbolic links that link to the busybox binary (there are tonnes):

lrwxrwxrwx root root 2012-07-13 19:08 who -> /system/xbin/busybox

For each one of these, do the following (this one is an example for the "who" command). Be VERY careful only to delete the symlinks to the busybox binary. DO NOT DELETE ANY REAL FILES SUCH AS busybox, dexdump and the like:

/system/bin/toolbox rm /system/xbin/who

You should end up with something like the following remaining in /system/xbin:

-rwxr-xr-x root shell 853044 2012-09-07 13:01 busybox
-rwxr-xr-x root shell 59760 2012-09-28 16:06 dexdump
-rwx------ root root 5380 2012-09-28 16:06 ps3bttest
-rwxr-xr-x root shell 23592 2012-09-28 16:06 rfcomm

/system/xbin is now clear. Now, we need to fix the symlinks in /system/bin. Your ls -l output from before showed me that a lot of the symlinks were pointing to a binary that no longer exists.

/system/xbin/busybox ls -l /system/bin
<snip>
lrwxrwxrwx root root 2012-09-28 21:25 ps -> /data/local/toolbox

Everything that points to /data/local/toolbox needs to be fixed to point to just "toolbox". To fix the example above, you'd need first change to the /system/bin directory by doing:

cd /system/bin

Then to repoint the ps command:

/system/bin/toolbox ln -s toolbox ps

ps should now look like:

lrwxrwxrwx root root 2012-09-28 21:25 ps -> toolbox

When everything that was pointing to /data/local/toolbox is pointing to just toolbox, wifi should be fine again. You have to do all the symlinks in /system/bin pointing to /data/local/toolbox, not just ps!

Finally, you need to update your su binary. We'll put it in /system/xbin, as /system/bin shouldn't be used for root, busybox or any other stuff... or this sort of thing could happen again. The NEW one I've attached is about 90Kb (for /system/xbin), where as the older one (currently in /system/bin) is around 22Kb.

cat /data/local/tmp/su > /system/xbin/su
chown 0.0 /system/xbin/su
chmod 06755 /system/xbin/su
rm /data/local/tmp/su

You should check the su binary for permissions before you remove the old one in /system/bin. You now shouldn't need to use the long-winded busybox/toolbox commands to do what you need. :)

shell@android:/system/bin # ls -l /system/xbin/su
-rwsr-sr-x root root 91980 2012-09-30 00:10 su

If yours looks exactly like that, it's looking very good for you! Go ahead and remove the old su binary in /system/bin.

rm /system/bin/su

Here are my directories for your reference:

/system/bin

shell@android:/system/bin # ls -l /system/bin
-rwxr-xr-x root shell 96360 2012-09-28 16:03 adb
-rwxr-xr-x root shell 191 2011-12-23 13:40 am
-rwxr-xr-x root shell 9500 2012-09-28 16:03 app_process
-rwxr-xr-x root shell 49452 2012-09-28 16:03 applypatch
-rwxr-xr-x root shell 9508 2008-08-01 13:00 atrace
-rwxr-xr-x root shell 5108 2012-09-28 16:03 bluetoothd
-rwxr-xr-x root shell 199 2011-12-23 13:40 bmgr
-rwxr-xr-x root shell 21788 2012-09-28 16:03 bootanimation
-rwxr-xr-x root shell 14004 2012-09-28 16:03 brcm_patchram_plus
-rwxr-xr-x root shell 1747 2008-08-01 13:00 bt_firmware_loader.sh
-rwxr-xr-x root shell 156 2008-08-01 13:00 bu
-rwxr-xr-x root shell 954 2008-08-01 13:00 bugmailer.sh
-rwxr-xr-x root shell 5352 2012-09-28 16:03 bugreport
-rwxr-xr-x root shell 5352 2008-08-01 13:00 camera_fw_check
lrwxrwxrwx root root 2012-09-29 20:52 cat -> toolbox
-rwxr-xr-x root shell 587981 2008-08-01 13:00 chat
lrwxrwxrwx root root 2012-09-29 20:52 chmod -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 chown -> toolbox
-rwxr-xr-x root shell 37 2011-12-23 13:40 cluster
-rwxr-xr-x root shell 44 2011-12-23 13:40 cluster_get.sh
-rwxr-xr-x root shell 50 2011-12-23 13:40 cluster_set.sh
lrwxr-xr-x root shell 2011-12-23 13:44 cmp -> toolbox
-rwxr-xr-x root shell 207 2008-08-01 13:00 content
-rwxr-xr-x root shell 5352 2012-09-28 16:03 dalvikvm
lrwxr-xr-x root shell 2011-12-23 13:44 date -> toolbox
-rwxr-xr-x root shell 132440 2012-09-28 16:03 dbus-daemon
-rwxr-xr-x root shell 43 2011-12-23 13:40 dcc
lrwxrwxrwx root root 2012-09-29 20:53 dd -> toolbox
-rwxr-xr-x root shell 21736 2012-09-28 16:03 debuggerd
-rwxr-xr-x root shell 9396 2012-09-28 16:03 dexopt
lrwxrwxrwx root root 2012-09-29 20:53 df -> toolbox
-rwxr-xr-x root shell 58788 2012-09-28 16:03 dhcpcd
lrwxr-xr-x root shell 2011-12-23 13:44 dmesg -> toolbox
-rwxr-xr-x root shell 105816 2012-09-28 16:03 dnsmasq
-rwxr-xr-x root shell 26060 2012-09-28 16:03 downloader
-rwxr-xr-x root shell 50460 2012-09-28 16:03 drmserver
-rwxr-xr-x root shell 38184 2012-09-28 16:03 dumpstate
-rwxr-xr-x root shell 9448 2012-09-28 16:03 dumpsys
-rwxr-xr-x root shell 122500 2008-08-01 13:00 e2fsck
-rwxr-xr-x root shell 26148 2012-09-28 16:03 fsck_msdos
-rwxr-xr-x root shell 605137 2012-09-28 16:03 fu
lrwxr-xr-x root shell 2011-12-23 13:44 getevent -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 getprop -> toolbox
-rwxr-xr-x root shell 1154080 2012-09-28 16:03 glgps
-rwxr-xr-x root shell 9448 2012-09-28 16:03 gzip
-rwxr-xr-x root shell 27176 2012-09-28 16:03 hciattach
lrwxr-xr-x root shell 2011-12-23 13:44 hd -> toolbox
-rwxr-xr-x root shell 10024 2012-09-28 16:03 hdcp_test
-rwxr-xr-x root shell 272688 2012-09-28 16:03 hostapd
-rwxr-xr-x root shell 64 2011-12-23 13:40 hotplug
lrwxrwxrwx root root 2012-09-29 20:53 id -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 ifconfig -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 iftop -> toolbox
-rwxr-xr-x root shell 194 2011-12-23 13:40 ime
-rwxr-xr-x root shell 201 2011-12-23 13:40 input
lrwxrwxrwx root root 2012-09-29 20:53 insmod -> toolbox
-rwxr-xr-x root shell 22012 2012-09-28 16:03 installd
lrwxr-xr-x root shell 2011-12-23 13:44 ioctl -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 ionice -> toolbox
-rwxr-xr-x root shell 136672 2012-09-28 16:03 ip
-rwxr-xr-x root shell 187372 2012-09-28 16:03 ip6tables
-rwxr-xr-x root shell 196260 2012-09-28 16:03 iptables
-rwxr-xr-x root shell 13596 2012-09-28 16:03 isp_fw_update
-rwxr-xr-x root shell 14232 2012-09-28 16:03 keystore
lrwxrwxrwx root root 2012-09-29 20:54 kill -> toolbox
-rwxr-xr-x root shell 79908 2012-09-28 16:03 linker
lrwxrwxrwx root root 2012-09-29 20:54 ln -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 log -> toolbox
-rwxr-xr-x root shell 13600 2012-09-28 16:03 logcat
-rwxr-xr-x root shell 9516 2012-09-28 16:03 logwrapper
lrwxrwxrwx root root 2012-09-29 20:54 ls -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 lsmod -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 lsof -> toolbox
-rwxr-xr-x root shell 10436 2012-09-28 16:03 make_ext4fs
lrwxrwxrwx root root 2012-09-28 16:10 md5 -> toolbox
-rwxr-xr-x root shell 259452 2008-08-01 13:00 mdnsd
-rwxr-xr-x root shell 5300 2012-09-28 16:03 mediaserver
lrwxrwxrwx root root 2012-09-29 20:54 mkdir -> toolbox
-rwxr-xr-x root shell 153344 2012-09-28 16:03 mksh
-rwxr-xr-x root shell 217 2011-12-23 13:40 monkey
lrwxrwxrwx root root 2012-09-29 20:54 mount -> toolbox
-rwxr-xr-x root shell 60 2011-12-23 13:40 mount_debugfs.sh
-rwxr-xr-x root shell 17856 2012-09-28 16:03 mtpd
lrwxr-xr-x root shell 2011-12-23 13:44 mv -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 nandread -> toolbox
-rwxr-xr-x root shell 5304 2012-09-28 16:03 ndc
-rwxr-s--- root inet 5484 2012-09-28 16:03 netcfg
-rwxr-xr-x root shell 71200 2012-09-28 16:03 netd
lrwxr-xr-x root shell 2011-12-23 13:44 netstat -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 newfs_msdos -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 notify -> toolbox
-rwxr-xr-x root shell 5304 2012-09-28 16:03 nv_hciattach
-rwxr-xr-x root shell 13492 2008-08-01 13:00 nvcap_test
-rwxr-xr-x root shell 5424 2008-08-01 13:00 nvremotell
-rwxr-xr-x root shell 5420 2012-09-28 16:03 nvtest
-rwxr-xr-x root shell 18188 2012-09-28 16:03 pand
-rwxr-sr-x root net_raw 26056 2012-09-28 16:03 ping
-rwxr-xr-x root shell 191 2011-12-23 13:40 pm
-rwxr-xr-x root shell 141868 2012-09-28 16:03 pppd
-rwxr-xr-x root shell 141868 2012-09-28 16:03 pppd_btdun
lrwxr-xr-x root shell 2011-12-23 13:44 printenv -> toolbox
lrwxrwxrwx root root 2012-09-29 20:55 ps -> toolbox
-rwxr-xr-x root shell 1014 2012-09-28 16:03 ps3service
-rwxr-xr-x root shell 5320 2012-09-28 16:03 python
-rwxr-xr-x root shell 166808 2012-09-28 16:03 racoon
lrwxr-xr-x root shell 2011-12-23 13:44 reboot -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 renice -> toolbox
-rwxr-xr-x root shell 188 2008-08-01 13:00 requestsync
lrwxrwxrwx root root 2012-09-29 20:55 rm -> toolbox
-rwxr-xr-x root shell 5376 2008-08-01 13:00 rm_ts_server
lrwxr-xr-x root shell 2011-12-23 13:44 rmdir -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 rmmod -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 route -> toolbox
-rwsr-s--- root shell 9448 2012-09-28 16:03 run-as
-rwxr-xr-x root shell 5304 2012-09-28 16:03 schedtest
lrwxr-xr-x root shell 2011-12-23 13:44 schedtop -> toolbox
-rwxr-xr-x root shell 9396 2012-09-28 16:03 screencap
-rwxr-xr-x root shell 34168 2012-09-28 16:03 screenshot
-rwxr-xr-x root shell 13600 2012-09-28 16:03 sdcard
-rwxr-xr-x root shell 45920 2012-09-28 16:03 sdptool
-rwxr-xr-x root shell 173 2008-08-01 13:00 send_bug
lrwxr-xr-x root shell 2011-12-23 13:44 sendevent -> toolbox
-rwxr-xr-x root shell 13492 2012-09-28 16:03 sensors-config
-rwxr-xr-x root shell 5352 2012-09-28 16:03 sensorservice
-rwxr-xr-x root shell 13544 2012-09-28 16:03 service
-rwxr-xr-x root shell 9608 2012-09-28 16:03 servicemanager
lrwxr-xr-x root shell 2011-12-23 13:44 setconsole -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 setprop -> toolbox
-rwxr-xr-x root shell 5352 2008-08-01 13:00 setup_fs
lrwxrwxrwx root root 2012-02-06 21:50 sh -> mksh
-rwxr-xr-x root shell 9524 2012-09-28 16:03 sixpair
lrwxr-xr-x root shell 2011-12-23 13:44 sleep -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 smd -> toolbox
-rwxr-xr-x root shell 46364 2012-09-28 16:03 stagefright
lrwxr-xr-x root shell 2011-12-23 13:44 start -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 stop -> toolbox
-rwxr-xr-x root shell 5352 2012-09-28 16:03 surfaceflinger
-rwxr-xr-x root shell 192 2011-12-23 13:40 svc
lrwxr-xr-x root shell 2011-12-23 13:44 sync -> toolbox
-rwxr-xr-x root shell 5300 2012-09-28 16:03 system_server
-rwxr-xr-x root shell 67096 2012-09-28 16:03 tc
-rwxr-xr-x root shell 17640 2012-09-28 16:03 tegrastats
-rwxr-xr-x root shell 13904 2012-09-28 16:03 tf_daemon
-rwxr-xr-x root shell 104964 2012-09-29 21:50 toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 top -> toolbox
lrwxrwxrwx root root 2012-02-06 21:50 touch -> toolbox
-rwxr-xr-x root shell 91820 2012-09-28 16:03 touch_fw_update
-rwxr-xr-x root shell 3391 2008-08-01 13:00 uiautomator
lrwxr-xr-x root shell 2011-12-23 13:44 umount -> toolbox
lrwxr-xr-x root shell 2011-12-23 13:44 uptime -> toolbox
-rwxr-xr-x root shell 5304 2012-09-28 16:03 vdc
lrwxr-xr-x root shell 2011-12-23 13:44 vmstat -> toolbox
-rwxr-xr-x root shell 75288 2012-09-28 16:03 vold
lrwxr-xr-x root shell 2011-12-23 13:44 watchprops -> toolbox
-rwxr-xr-x root shell 9480 2012-09-28 16:03 wifimacwriter
lrwxr-xr-x root shell 2011-12-23 13:44 wipe -> toolbox
-rwxr-xr-x root shell 45904 2012-09-28 16:03 wminput
-rwxr-xr-x root shell 608680 2012-09-28 16:03 wpa_supplicant
-rwxr-xr-x root shell 21788 2012-09-28 16:03 wvdrmserver
-rwxr-xr-x root shell 17644 2012-09-28 16:03 xaplay

/system/xbin

shell@android:/system/bin # ls -l /system/xbin
-rwxr-xr-x root shell 853044 2012-09-07 13:01 busybox_lol
-rwxr-xr-x root shell 59760 2012-09-28 16:06 dexdump
-rwx------ root root 5380 2012-09-28 16:06 ps3bttest
-rwxr-xr-x root shell 23592 2012-09-28 16:06 rfcomm
-rwsr-sr-x root root 91980 2012-09-30 00:10 su

Remount as read only and you should be good to go, no reboot required, but if it's behaving oddly, go ahead and reboot.

mount -o ro,remount /system

At this point you should install OTA Root Keeper, SuperSU etc. They should work fine (for some reason they wouldn't work with the old su binary that was present!).

Let me know how you get on.