According to the installation-guide-i386 of ubuntu 9.04 the needed
option is:

d-i user-setup/encrypt-home boolean false

AFAIK this does NOT work with ubuntu 8.10.

Also there is no default defined, so that you cannot completely preseed
an installation (fix releases for jaunty, see Bug #328281)

These fixes should be integrated in intrepid.

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can't preseed encryption status of user's home directory
https://bugs.launchpad.net/bugs/285722
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