I reproduced the bug with another USB drive. I therefore think it has to
do with the hardware not being properly recognised. raring won't run
with my hardware:

System Information (from Phoronix Test Suite v4.4.1)

Hardware:
Processor: Intel Atom N270 @ 1.60GHz (2 Cores), Motherboard: Acer AOA150, 
Chipset: Intel Mobile 945GSE MCH + ICH7-M, Memory: 512 MB + 1024 MB 
DDR2-533MHz, Disk: 160GB Seagate ST9160310AS, Graphics: Intel Mobile 945GSE 
IGP, Audio: Realtek ALC268, Network: Realtek RTL8101E/RTL8102E

Other important things to know: partition with the btrfs file system,
screen resolution: 1024x600

PROCESSOR:

Core Count: 1
Thread Count: 2
Cache Size: 512 KB
Instruction Set Extensions: SSE 2
AES Encryption: NO
Energy Performance Bias: NO
Virtualization: NO
Compiler Configuration: --build=i486-linux-gnu --enable-checking=release 
--enable-clocale=gnu --enable-gnu-unique-object 
--enable-languages=c,c++,go,fortran,objc,obj-c++ --enable-libstdcxx-debug 
--enable-libstdcxx-time=yes --enable-nls --enable-objc-gc --enable-plugin 
--enable-shared --enable-targets=all --enable-threads=posix 
--host=i486-linux-gnu --target=i486-linux-gnu --with-arch-32=i586 
--with-tune=generic -v
Disk Scheduler: CFQ
Disk Mount Options: relatime,rw,space_cache
Cpu Scaling Governor: ondemand
Graphics 2d Acceleration: UXA

** Changed in: ubiquity (Ubuntu)
       Status: Invalid => New

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https://bugs.launchpad.net/bugs/1159352

Title:
  "Download updates while installing" stuck

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