Few days back I was trying to install Xubuntu 7.10 in my machine with WUBI. The installation began ok, but at some point it stucks and showed me the message :
[173.22] Buffer I/O error on device FD0, Logical Block 0
[182.56] Buffer I/O error on device FD0, Logical Block 0
and it continued to show those errors. The installation was a failure.
After some searching in the Internet, I figured out what went wrong. I don't have any floppy drive attached(I have one but I disconnected it long ago. I hate floppies :P) with the motherboard. yet, the installer was trying to read from the floppy drive. As a result the aforementioned error appeared.
The solution was simple! From the BIOS, I disabled the FDD and after that installation went on smoothly. Hope it works for you! :)