This bug was fixed in the package casper - 1.254

---------------
casper (1.254) natty; urgency=low

  * More fixes to the USB update-initramfs shim (LP: #591207):
    - Make the shim a proper executable in
      /usr/share/casper/casper-update-initramfs and symlink to it if
      necessary at boot time, so that new versions of this shim are
      automatically installed when casper is upgraded.
    - $bootdir/initrd.img may exist when $bootdir/vmlinuz doesn't; for
      example, if we're running off a fresh live USB stick and the kernel
      hasn't yet been upgraded.
 -- Colin Watson <[email protected]>   Thu, 20 Jan 2011 14:18:59 +0000

** Changed in: casper (Ubuntu)
       Status: In Progress => Fix Released

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https://bugs.launchpad.net/bugs/591207

Title:
  Casper's USB update-initramfs shim should look for initrd.img in /boot

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