I have tested booting off a directory containing the extracted ISO content 
using the daily iso 20080620.1. It is possible to boot properly and the 
installation proceeds past autopartition-loop (but it stops at 94% because of 
#243105).
I have tested booting off an ISO and installing and that also works well.

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Support bindmounts when detecting the target mountpoint
https://bugs.launchpad.net/bugs/238701
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