I can confirm that this bug exists in the Ubuntu 10.04 Lucid Alpha 2
amd64 iso installed on a Ubuntu 9.10 Karmic Koala amd64 KVM host.

** Changed in: grub2 (Ubuntu)
       Status: New => Confirmed

** Changed in: grub2 (Ubuntu)
   Importance: Undecided => High

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Grub fails to install on Lucid virtio-based guests running under KVM during 
installation
https://bugs.launchpad.net/bugs/524941
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