Installing Lucid Lynk 10.04 RC test ISO (on Wubi) from CD or ISO image
mounted on XP, I had the same problem.

Workaround: clicking with the mouse, moving the window or hitting ENTER
again and again let the install complete the task (but very slow!)

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blkid (sometimes?) hangs on extended partition if same device name existed 
before partitioning
https://bugs.launchpad.net/bugs/528073
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