With the release of the third update of Lucid Lynx (10.04.3) last week, this finally puts to bed the problems with Wubi and Grub2 (Ubuntu's bootloader) that resulted in many Wubi boot failures. The issue that allowed the user to overwrite the Windows bootloader is also taken care of.
These issues were fixed prior to the release of Natty Narwhal earlier this year, however, the patches to the active stable releases (Lucid and Maverick) were only released as an Update in June, and finally in 10.04.3 last week.
This was certainly a big problem that has plagued Wubi users for over a year; longer if you include the problem in 9.10 Karmic Koala. It kept many on ubuntuforums.org busy and led to the successful Wubi megathread (thanks to Rubi1200 for that).
I have been quite critical of Canonical and the developers on this blog for not addressing this sooner (this problem was probably the driving force behind the blog in the first place), however, I think it's true that my focus is quite narrow and the developers have many issues to deal with, and Wubi wasn't always on the top of that list.
It appears that now there is a strong development effort to improve Wubi for 11.10 Oneiric Ocelot - which I'll write about later. So far, I've been running a development Oneiric Ocelot Wubi install from early on in the development cycle without any issues.
One thing seems certain - Wubi is popular as ever with new users and a great tool to introduce Windows users to Ubuntu.