Using up-to-date (x86_64) Karmic, I have the same problem. Firstly I
cannot format using usb startup disk creator (not a big problem, using
palimpsest to format to FAT). Using usb startup install fails with an
uncaught exception error. All the files are on the USB stick apart from
symlinks from 'stable' and 'unstable'. Cannot manually create symlinks
using gnome or bash, and this appears to be the issue.

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USB Startup Disk Creator no longer works in Ubuntu 9.04
https://bugs.launchpad.net/bugs/366087
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