If I understood correctly so far,
trial-and-error tried a beta 12.04 installation, and the problem was an initial 
empty /etc/nbd-server/conf.d/ltsp_i386.conf, which we don't know how it was 
generated,
and niplas did an upgrade and had a wrong /etc/nbd-server/conf.d/ltsp_i386.conf 
from his older setup which wasn't upgraded (did 11.10 use name-based nbd 
exports?).

I don't think anyone has reported this problem on a clean 12.04 installation 
after release, right?
Anthony was yours a clean installation or an upgrade?

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https://bugs.launchpad.net/bugs/951526

Title:
  i386: Client drops into BusyBox

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