I've found the same problem in the Feisty->Hardy upgrade. I fixed it
logging as root (using 'su' and not 'sudo'!) in a terminal and then
adding the line:

 127.0.0.1 ubuntu

to /etc/hosts file (in my case the machine name is "ubuntu").

-- 
unable to resolve host
https://bugs.launchpad.net/bugs/195308
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