I think like Dmitri said this is the same as #435352 . What's happening
is the webcam driver is clashing with USB at some point which is making
the USB drive fail after a certain point (although it works initially).

If somebody were to test turning off the camera before install this bug
could be put to rest as it is unlikely to happen in the next release.
(There's also a BIOS patch from MSI that fixes the problem)

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Karmic boot fails (end_request) on Targa 1016 (MSI U120 oem)
https://bugs.launchpad.net/bugs/428632
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