I had this issue in the 12.04 final, my /home partition is not-encrypted AFAIK, 
and i chose not to format my /dev/sda6 home partition. however in the 
installer, home was pre-selected for encryption in the options, and greyed out 
(had no choice but to continue).
Continuing the installation resulted in the above error.

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https://bugs.launchpad.net/bugs/985526

Title:
  exit with error if encryption is selected

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