This bug was fixed in the package cloud-init - 0.6.1-0ubuntu6

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cloud-init (0.6.1-0ubuntu6) natty; urgency=low

  * avoid upgrade prompt for grub-pc when devices are named xvdX (LP: #752361)
  * catchup to trunk cloud-init (rev 395)
 -- Scott Moser <[email protected]>   Wed, 06 Apr 2011 06:46:55 -0400

** Changed in: cloud-init (Ubuntu)
       Status: New => Fix Released

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https://bugs.launchpad.net/bugs/752361

Title:
  grub prompts for install device on upgrade

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