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I just did clean install of 8.04 32bit RTM into 16Gb that I freed up on my hard drive (existing Windows XP installation). My internet connection is wireless, and requires WEP key (ie. no internet available during the install routine). I did NOT have this problem with my install. The software repositories seem to be still selected and everything looks as it should be.
I did, however, have this problem with the 7.10 32bit RTM release. So, it looks like something has been fixed up along the line.
Certainly, I agree with suggestions that internet connection should not be compulsory during install, and the install routine should play 'nice' in these situations. Ask the user before it tries to make internet connections, and allow the user to skip or delay this step because, like me, the internet connection may not be permanently available.