This is not a permanent solution but just a workaround for anyone wishing to 
upgrade without formatting target partition.
 
I was trying to set up 12.04 Beta 1 without formatting my /-mounted partition 
and got stuck at this.
My 11.10 setup was going to be a pain to upgrade anyway - had troublesome 
upgrade earlier when using .

I booted with an alternate cd and removed everything I did not need (/var /lib 
/opt e.t.c) except /home.
For good measure, I also renamed /home and then installed 12.04 beta 1 without 
formatting target partition - went smoothly.

Hope this is useful.

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https://bugs.launchpad.net/bugs/875343

Title:
  Stuck at "Saving installed packages..." when using a custom /var

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