I also get this bug using a Karmic beta LiveUSB. It produces these
messages...

cp: cannot create '/root/var/log/' : No such file or directory
cp: cannot create '/root/etc/' : Is a directory
mount: mounting /dev on /root/dev failed: No such file or directory
mount: mounting /sys on /root/sys failed: No such file or directory
Target filesystem doesn't have /sbin/init.
No init found. Try passing init= bootarg.

...then drops to BusyBox. This is on a Dell Dimension 9150 with Jaunty
already installed, Intel P4 3.8 GHz, 4 GB RAM, Raid Hard drive
configuration.

-- 
boots to busybox prompt: Target filesystem doesn't have /sbin/init
https://bugs.launchpad.net/bugs/442462
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