I can confirm that this is a problem if use Unetbootin to create the usb
drive.  I just tried this tonight with Unetbootin and the iso that I
downloaded from Kubuntu's site.  I am currently downloading the daily
live build to see if this will work that way.  When using the latest
download from Kubuntu and Unetbootin it states that the drive /dev/sdg
(my usb drive) is mounted and you can either hit continue or go back.
According to the dialog the Continue should power through it and ignore
the mounted drive however it does not.  As I said I am currently
building with the live build so I will report back my findings once it
is completed.  Thank you.

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[jaunty] Bootable USB Jaunty Beta can't install - HD mounts as CDROM
https://bugs.launchpad.net/bugs/353274
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