Actually, Matt, it's a longstanding bug in initramfs-tools (and one I refuse to let myself forget to fix before dapper) that initramfs-tools doesn't have much in the way of useful error conditions, and certainly doesn't fail it if runs out of space. This bug if very real (and very annoying, and very getting fixed next week, with several other "Eek, initramfs-tools is broken in weird ways, but we never noticed until now" bugs.
Actually, Matt, it's a longstanding bug in initramfs-tools (and one I refuse to let myself forget to fix before dapper) that initramfs-tools doesn't have much in the way of useful error conditions, and certainly doesn't fail it if runs out of space. This bug if very real (and very annoying, and very getting fixed next week, with several other "Eek, initramfs-tools is broken in weird ways, but we never noticed until now" bugs.