I was installing Gutsy on Dell GX150 (256MB RAM, harddisk is labeled
/dev/sda). I was installing on /dev/sda2 , where was already Ubuntu
7.04. The installation halted also at 5% when formatting ext3. I
manually partitioned the disk. When I tried for the second time, I let
the installer to automatically partition the disk (use largest
continuous space) and it let sda2 (ext3) and sda3 (swap) untouched and
created sda4 (ext3) and sda5 (swap). For this time it suprisingly
worked.

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[gutsy beta] installer hangs when formatting partitions
https://bugs.launchpad.net/bugs/146687
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