I also was stuck on the "Creating ext3 file system for / in partition #1
on SCSI1 (0.0.0)" error for a long time.  The answer is to use the
separate partition editor to create new partitions, then do the
installation and use those existing partitions.  I finally installed
Ubuntu 9.04 this way on an old formerly-XP computer.

See also
http://ubuntuforums.org/showthread.php?t=580437
http://ubuntuforums.org/showthread.php?p=2718455#post2718455

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The ext3 file system creation in partition #1 of SCSI1 (0,0,0) (sda) failed.
https://bugs.launchpad.net/bugs/99908
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