I agree.  As my report implies, I was physically connected to my LAN,
which has a router connected to the Internet.   When I manually ran the
update manager, it did connect with no trouble.  I suppose the live CD
had not made a logical connection yet when the update manager was run
automatically at login of the administrative user.   When the update
manager runs, if no logical connection has been made yet, the connection
should be made while the update manager is held suspended until
connection is available, instead of giving an error that is confusing
like this.

-- 
[Hardy 8.04 Alpha-3 Live-CD]  Update-manager icon reports "unable to 
communicate with backend".
https://bugs.launchpad.net/bugs/181923
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