I don't expect that this is a bug in Ubuntu. I installed the latest MikTeX on Windows XP and I have the same problem with XeLaTeX, with and without a similar /DeclareGraphicsExtensions. latex also compiles fine on windows.
I don't expect that this is a bug in Ubuntu. I installed the latest MikTeX on Windows XP and I have the same problem with XeLaTeX, with and without a similar /DeclareGraphic sExtensions. latex also compiles fine on windows.