Just experienced the same bug with this error message: "UnicodeDecodeError: 
'ascii' codec can't decode byte 0x8b in position 1: invalid start byte"
What I've done: Start Live-USB-Installer with Alpha 1 from 4GB USB-Stick
 * Click "Install Ubuntu"
 * Changed nothing (no codecs, no updates) until partition takes place:
 * Formatting sda3 for / and using (not formatting) sda4 as /home (from former 
Quantal installation).
 * GRUB was being installed on sda3 (/).
 * Discard warning about missing Swap (I  didnt't want/use it with 8 GB RAM), 
partitioner starts.
 * Localization was correct (Berlin), after starting to enter Name, Password 
etc Ubiquity stopps with the above mentioned error message.

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https://bugs.launchpad.net/bugs/1010316

Title:
  ubiquity crashed in install.py", line 218, in generate_blacklist :
  UnicodeDecodeError: 'utf-8' codec can't decode byte 0x8b in position
  1: invalid start byte

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