I had the same issue, wound up deleteing the partition and trying to reinstall 
got the same issue. In the process I bricked my windoze XP install (run the 
fixmbr and fixboot command from the recovery console to fix this and avoid 
reinstalling XP Pro).
 Long story short, by removing all USB devices the install was able to 
complete...

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Ubuntu 9.04 will not boot from install or livecd: hid2hci
https://bugs.launchpad.net/bugs/401223
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