I had this problem like an hour ago, Tim set me straight. Yes please
format and re-create the USB flash, also I selected "discard settings on
shutdown". Please remember to click on the "QUIT" button when  USB flash
creator is done, only then unmount/eject device.

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Ubuntu 9.04 beta desktop fails to boot from usb-stick
https://bugs.launchpad.net/bugs/350946
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