Public bug reported:

This report applies to Eucalyptus in Karmic

The default configuration file (/etc/eucalyptus/eucalyptus.conf) that is
installed by the UEC installer/eucalyptus-cc/eucalyptus-nc packages has
the networking mode (VNET_MODE) set to SYSTEM.  In order to enable
security groups, elastic IPs, and meta-data service, the mode should be
set to MANAGED-NOVLAN along with the extra parameters that are required
for MANAGED-NOVLAN to operate properly.  On the CC, these are:

VNET_MODE
VNET_SUBNET
VNET_NETMASK
VNET_DNS
VNET_ADDRSPERNET
VNET_PUBLICIPS

on the node, this is:

VNET_MODE

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

-- 
CC and NC networking mode is set to 'SYSTEM' by default
https://bugs.launchpad.net/bugs/425914
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