i experience this bug in quantal 12.10 daily (7/7/12).
i've installed quantal, as a test, on a 8 gb stick formated btrfs as / and 
there everything works.
Then because this worked, i decided to install it to my internal harddrive and 
got most likely this problem.
I have seen these messages:
ubuntu grub-installer: Embedding is not possible. GRUB can only be installed in 
this setup by using blocklists. However, blocklists are UNRELIABLE and their 
use is discouraged.
ubuntu grub-installer: cannot read `/@/boot/grub/core.img' correctly"
in the window below of the installer.

Also as above, i reinstalled from the same live envirement (didn't
reboot) and used ext4 and the installation finished without a problem.

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https://bugs.launchpad.net/bugs/800840

Title:
  unable to install grub 2 on btrfs

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