vmbuilder must be run as root. You ran it as non-root user, which was the reason for the error. You will also need to use ubuntu' in place of natty for the second argument, and specify natty for the suite instead. Something like the following should work:
Thanks for taking the time to report this bug.
vmbuilder must be run as root. You ran it as non-root user, which was the reason for the error. You will also need to use ubuntu' in place of natty for the second argument, and specify natty for the suite instead. Something like the following should work:
sudo vmbuilder kvm ubuntu --suite=natty -addpkg= openssh- server --addpkg=nano