Any Wubi install that is on the same partition as Windows i.e. the C: 'drive' is impacted. Shockingly it appears the grub update wasn't even tested - a brand new install of 10.04.1 followed by the grub update renders it unbootable.
So what can I do to fix it?
Unfortunately the fix (Problem #2, Solution #1) is complex, especially for a new Ubuntu user. This fix has been developed by users on Ubuntuforums.org without the help of the developer. This isn't really surprising based on his comment here regarding the 10.10 upgrade issue:
[14:38] <jibel> cjwatson, did you saw my update on bug 653134 ?
[14:38] <ubottu> Launchpad bug 653134 in lupin (Ubuntu Maverick) "Can't boot Ubuntu after an upgrade from 10.04.1 to 10.10" [High,Triaged] https://launchpad.net/bugs/653134
[14:39] <cjwatson> jibel: I doubt there is anything else I can do now
[14:39] <cjwatson> loopback loop0 /ubuntu/disks/root.disk <- don't see how it could boot at all without that
[14:40] <cjwatson> lang=fr/lang=en> hmm
[14:41] <cjwatson> I guess I could try a non-English installation, since that sounds like a serious contributor to the problem
[14:41] * cjwatson hates life
[14:41] <jibel> cjwatson, I must admit that I don't understand either, I commented the lines one by one until I've found the one that's blocking the boot.
[14:42] <cjwatson> wubi upgrades have never worked right before. it would have been nice to say that they worked this time, but I have a hard time considering it a blocker
[14:43] <cjwatson> (this is not to say I don't appreciate efforts to get them to boot ...)
[14:43] <cjwatson> er, to work
[14:43] <cjwatson> wubi really needs a maintainer who isn't me. Agostino has been mostly lacking in time
[14:44] <cjwatson> I'm only doing it by default
Could this be the final nail in the coffin for Wubi?
It's ironic that those careful users, who read the 10.10 release notes and stayed wisely on 10.04, but religiously install all Important updates can no longer boot. Even Wubi's most ardent supporters must find it hard to defend the product in the face of such unreliability.
All in all, Canonical should either relegate Wubi to the unsupported fringe, or else shake up their development staff: releasing production fixes without any testing!!!???? Hello!?