This has been fixed, can confirm the launcher now says

"Install Ubuntu 9.10"
 with tooltip 
"Install this system permanently to your hard disk"

in Alpha-4 (screenshot attached), setting bug as fixed.

** Attachment added: "screenshot.png"
   http://launchpadlibrarian.net/30385726/screenshot.png

** Changed in: hundredpapercuts
       Status: Confirmed => Fix Released

** Changed in: ubiquity (Ubuntu)
       Status: Confirmed => Fix Released

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Ubuntu LiveCD "Install" icon confusing
https://bugs.launchpad.net/bugs/154506
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