try this.....it looks like it may be a bug http://www.ankurb.info/2008/11/19/solving-ubuntu-usb-disk-install-error/
This happens on only certain makes of BIOS and hardware, and isnâ€™t actually anything scary. The solution for this is pretty simple:
1. When you encounter the error message, force a shutdown by pressing down the power button.
2. Power up, and pop the Ubuntu Live CD into your CD tray. Boot into the Live CD session.
3. Plug-in your USB drive. Wait for it to be detected. If the system prompts you to auto-run the USB drive, press Cancel.
4. Go to System > Administrator > Partition Editor. Wait for it to scan available media. When it does, switch the media to your USB disk from the dropdown box at the top right corner.
5. Right click on the USB disk partition which shows up and choose Unmount. (Iâ€™m assuming that the disk is mounted; if itâ€™s not you may skip this step.)
6. After it has been unmounted, right click again on the partition and choose the option Flags. In the dialog box that open, boot would already be checked. Let that be, and check the box next to lba. Click OK.
7. Apply any pending changes (if needed) by clicking the Apply button on top and close Partition Editor.
8. You can now shutdown / reboot the Live CD session. Note about Ubuntu 8.10 live CD session: On some system configs, shutdown / reboot might not work properly. If you reach a screen with a blinking cursor at the top only, eject CD / unplug pen drive. Software already loaded onto RAM will encounter an error and then proceed with shutdown. This does not harm your system in any way.
Try booting from USB disk next time. It should work now. This is a bug in the USB creator in Ubuntu which doesnâ€™t add the LBA (logical block addressing) flag - which is needed for bootable partitions of size more than 500 MB. A small error, but one which can scare the wits out of some newcomer to Linux whoâ€™s trying out stuff.
This is directly out of the reading.