The same error happens with Ubuntu desktop when run inside VirtualBox :

"Failed to create a swap space"
The creation of swap space in partition #5 of IDE1 master (hda) failed.

Details:
VirtualBox 1.3.8 running on Windows XP pro SP2
VM machine : 16 MB VRAM, 512 MB RAM, 2.3 GB disk, CD is mounted ISO image

ubuntu cd 7.04 desktop i386
booted with default options
then on the desktop clicked Install, automatic partitioning

After the start of the installation (after clicking Finish in the wizard), at 
5% progress I get this dialog.
It only has an OK button, no cancel.

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Input/Output error during read on /dev/i2o/hda during Initial Install
https://bugs.launchpad.net/bugs/108984
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