I've just used unetbootin (latest - 292 I think) to burn the 8.10
release alternate CD to a USB key and I can confirm that the installer
cannot proceed past the "Detect CDROM" stage.  I'm giving up for now and
using 8.10 Desktop, but this means that I can't use full-disk encryption
(a requirement for my work) which means that I can't use Ubuntu as
planned at my organisation (without a lot of hassle - buying CDROMs for
the laptops (assuming I can) - burning CD's, etc).

I've tried simply mounting the USB into /cdrom using terminal two of the
installer, which works breifly but it then fails with a "failed to copy
file from CDROM" error message.  This may have something to do with the
use of Unetbootin, but I don't really understand grub, the installer
script, or about 99% of this thread, so I can't comment.

My preference for a solution would be to include full-disk encryption on
the Ubuiqity Live CD, but since that's been deferred for the last two
releases, I think getting it working here is more likely.

-- 
Alternate CD cdrom-detect.postinst does not consider USB flash drive/key. 
https://bugs.launchpad.net/bugs/234185
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