This should be fixed in Ubuntu 10.10, as of grub2 1.98+20100617-1.
Here's the changelog entry:
* Leaving grub-pc/install_devices empty makes sense in some situations,
but more often than not is a mistake. On the other hand, automatically
selecting all disk devices would upset some people too. Compromise by
simply asking for explicit confirmation if grub-pc/install_devices is
left empty, defaulting to false so that simply selecting all the
defaults in debconf can't leave you with an unbootable system (closes:
#547944, #557425).
** Changed in: grub2 (Ubuntu)
Status: Incomplete => Fix Released
** Changed in: grub2 (Ubuntu)
Assignee: (unassigned) => Colin Watson (cjwatson)
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In virtual box, when running upgrading grub2, failing to select a harddrive to
install to makes booting impossible.
https://bugs.launchpad.net/bugs/391924
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