Alternate ubuntu cdrom detect

An interesting thing to mention is that the Windows version of unetbootin doesn't seem to have this problem.
How is the Ubuntu/Linux version different from the Windows version?

Actually, neither the Windows nor the Linux versions add this magical "cdrom-detect/try-usb=true" boot option at the moment, I'll add a workaround soon. You were probably using the Hd-Media install option, which is a different way to use an alternate install iso.

There is a reason why this is being shown. I was getting the same message until I did this.
Once the usb live key is made, open it and go to the directory pool/main/l/linux. Over there sort all the files by their types. You'll notice that there are three files with the extension .ude
rename them with the extension .udeb and installation process will not give the cdrom not detected message anymore.
According to this the installer tries to search for the udeb files and on not encountering them thinks that there is some error.

so i guess if the canonical team rectifies the names in the cd images noone will have this problem.

Note- In my case the installation failed at a later point as well when i tried to install the desktop after installing the base system but that is a seperate issue.
Hope this helped. read this from a forum post by a member last nite. Cheers. srry for being a lil vague. He also said strangely the file extensions are .ude but the installation does not fail when an actual cdrom is used and that it was only for usb method. however i can confirm it solves the problem

This also affects Ubuntu server edition. I managed to get throught this issue by doing what was said in comment #3 and pressing tab when "default" was selected in unetbootin boot and pressing tab to add "cdrom-detect/try-usb=true" to that line. I found these instructions from http://blog.smalleycreative.com/linux/fix-for-ubuntu-10-04-server-usb-install/ .