Encountered the same problem using expert mode install with 9.10 Server
Edition (ubuntu-9.10-server-amd64.iso).

The following workaround, immediately prior to running the GRUB install
step, solved the problem.

  - open shell
  - mkdir /boot
  - mount -t ext2 /dev/sda5 /boot
  - cp /etc/mtab /target/etc/mtab

GRUB installed cleanly and the system rebooted without issue.

-- 
Karmic: legacy grub-install fails, possibly due to missing /target/etc/mtab
https://bugs.launchpad.net/bugs/465231
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