Public bug reported:

ProblemType: Bug
DistroRelease: Ubuntu 11.10
Uname: Linux 3.0.0-12-generic x86_64
Architecture: amd64
Date: Thu Oct 13
InstallationMedia: Ubuntu 11.10 "Oneiric Ocelot" - Beta amd64 (20111005)

Put in installation cd and boot up pc to run installation.
Do not choose to save installed packages, or installation will hang at the end 
of installation during restoring saved packages.

Installation procedure 1:
Choose install new. Installation will install a single file system.

Installation procedure 2:
Choose to customize your installation which allows you to specify partitions 
and mounts.
Choose to mount /home on another disk or partition. Let's say the user-admin 
name created is "abcd". Create as many users as you want. All the users' home 
directory will sit on the /home mounted partition/disk.

Comparison between procedure 1 and 2:
At end of installation and system restarts, try to log in as any non-root user.

Proc 1 will not present any problem logging in.

Proc 2 will result in user not able to access their home directory and
log-in will fail. But loggin in as root will be possible because the
root home is on root mount. When logged in as root, I will be able to
see that /home is mounted and all the user home dirs are visible. Using
a terminal, I dumb down from root privilege to user "abcd", and I
/home/abcd as well as home dirs of other users are visible at /home.

** Affects: nautilus (Ubuntu)
     Importance: Undecided
         Status: New

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https://bugs.launchpad.net/bugs/873159

Title:
  Ubuntu 11.10 installation does not like mounted /home

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