I did a server install with Ubuntu 7.10 (i386) server edition a few days
ago and the user thomas created in the install process is in the
following groups:

# grep thomas /etc/group
adm:x:4:thomas
dialout:x:20:thomas
cdrom:x:24:thomas
floppy:x:25:thomas
audio:x:29:thomas
dip:x:30:thomas
video:x:44:thomas
plugdev:x:46:thomas
scanner:x:104:thomas
thomas:x:1000:
lpadmin:x:109:thomas
admin:x:110:thomas

So for me it worked fine.

-- 
Initial user account created on install of Gutsy server is not added to admin 
group
https://bugs.launchpad.net/bugs/158952
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