Comment 58 for bug 234185

I can confirm it's still reproductable on lucid alternate, I've tried adding "cdrom-detect/try-usb=true" on boot but nothing changed.

Then I tried another solution that was successful on 9.04 (didn't remember the exact syntax, but something like this, the idea was to mount the key itself into the /cdrom directory and then point it when it says the cdrom can't be found):
- switch to the second virtual console during the first couple of dialogs by pressing the "ALT-2"
- mkdir /cdrom /dev/cdroms
- cd /dev/cdroms
- ln -s ../sda1 cdrom0 (where sda1 is your USB stick)
- mount -t vfat /dev/cdroms/cdrom0 /cdrom
- switch back to the first virtual console by pressing "ALT-1" and continue installation
But this was also unsuccessful.

In the end I tried to copy the iso image in the usb key and, similar to above, mounting the iso in loop as a cd.. but no changes.

It's useful to install the alternate cd to configure lvm, and if you have a netbook using the usb key is the unique solution..

Ps: the server version does the same thing as the alternate.