I'm having the same problem.
I tried with the Ubuntu desktop  CD and with the alternate CD.
I also tried creating the usb disk with the usb creator from Ubuntu and with 
the tool from 
http://www.pendrivelinux.com/downloads/Universal-USB-Installer/Universal-USB-Installer.exe

But the installation always fails with the message: "An attempt to
configure apt to install additional packages from the CD failed".

-- 
An attempt to configure apt to install additional packages from the CD failed 
upon install from USB
https://bugs.launchpad.net/bugs/658865
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