I updated to lucid lynx 10.04 and used the
System->Administration->Startup Disk Creator to do that on a Seagate USB
external drive, using the Ubuntu-10.04-desktop-i386.iso, on DVD media.
The create happenned without incident.  I can mount the USB drive and
see files OK.  If I attempt to boot the USB drive, I get the error as
described.

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Casper USB media fails to boot: USB storage device not detected, drops to 
(initramfs) prompt
https://bugs.launchpad.net/bugs/543427
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