I ran into this bug trying to make a Ubuntu 10.04 USB stick from the
10.04 iso on a running 10.04 system.  My workaround was to run the
program as superuser (gksu usb-creator-gtk).  The iso was not moved from
the download directory (was autodetected), and I didn't have to do
anything to /sdb.  I did waste a lot of time, though.

As it seems that the bug is still there, and the workaround doesn't work
in 11.04, perhaps the general instructions  here (
http://www.ubuntu.com/download/ubuntu/download ) need to be changed.

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https://bugs.launchpad.net/bugs/557775

Title:
  Persistent Storage option always greyed out

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