From 12.04 you will be able to install Edubuntu with Wubi. There are a few hurdles to overcome. The first is that Edubuntu requires a DVD image to install, and Wubi has built-in checks to prevent this - the ISO must be < 900,000,000 bytes (or 858MB) .
These same checks are what prevents users from installing a normal desktop CD image from a USB stick. These days USB sticks are generally large - in fact the Ubuntu download site states that a minimum of 2GB free space is required when creating a bootable USB.
But the way Wubi works is to copy the entire USB partition as the 'ISO' during the installation, and following that it performs the 900,000,000 byte check, and fails.
There is another danger because the USB partition is copied without any space checks. So imagine if you have 10GB space left on your hard drive, Wubi proceeds to install, but then tries to copy a 16GB USB stick partition onto that same hard drive. (That can only end badly). And even if you have enough space - it's going to fail the size check anyway.
Why is this an issue? More and more users are using USB sticks as they are cheaper, readily available and much less hassle than CDs (bad burn anyone?). But even more importantly, there have been reports that the Ubuntu desktop CD ISO will be increased 750MB size from release 12.04 on. This rules out the use of standards CDs. You can still burn a CD ISO onto a DVD - that works because the ISO does not expand to the DVD size in the same way as with a USB partition.