I'm going to mark this won't-fix for now.

I don't believe the Karmic images are going to be of primary value much
longer.  Surely people will bump up to 10.04 images soon.  And we have
now fixed the Lucid images to fit in 2G and set the default m1.small MEM
to 192M, and tested that Lucid images run well.

** Also affects: eucalyptus (Ubuntu Lucid)
   Importance: Low
       Status: Confirmed

** Changed in: eucalyptus (Ubuntu Lucid)
       Status: Confirmed => Won't Fix

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default karmic image from image-store doesn't run on default m1.small
https://bugs.launchpad.net/bugs/529056
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