Thanks for taking time report this bug.
When you install Ubuntu, Ubiquity asks you what type of partitioning you want 
to use: guided or manual. Guided has some options: use the biggest free space, 
replace the current linux partition, ... and something like to remove all data.
I think you have chosen the wrong option, so I'm going to mark this bug as 
invalid.
Feel free to tell me if I didn't understood the problem!

** Changed in: ubiquity (Ubuntu)
       Status: New => Incomplete

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[gutsy] install cd partition issue
https://bugs.launchpad.net/bugs/161027
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