Thanks for your report.
The relevant error is
=====
Testing for an existing GRUB menu.lst file ...
Could not find /boot/grub/menu.lst file. Would you like
/boot/grub/menu.lst generated for you? (y/N) n
Not creating /boot/grub/menu.lst as you wish
User postinst hook script [/sbin/update-grub] exited with value 1
=====
You've chosen to not generate the menu.lst and hence canceled the
installation process. This is an expected behavior and not a bug in
grub. I'm closing this report. Don't hesitate to submit any new bug.
** Changed in: grub (Ubuntu)
Status: New => Invalid
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package linux-image-2.6.31-15-generic 2.6.31-15.49 failed to install/upgrade:
subprocess installed post-installation script returned error exit status 1
https://bugs.launchpad.net/bugs/478834
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