Comment 8 for bug 609815

@Alex, I had the same issue when testing the MBR issue with the latest updates: choosing Ubuntu ends up at a grub prompt.I am assuming your wubi is on /dev/sda3 based on your comments:

This is the easy way but may not work:
grub> configfile (hd0,3)/ubuntu/winboot/wubildr.cfg

This is the long way:
grub> set root=(hd0,3)
grub> loopback loop0 /ubuntu/disks/root.disk
grub> set root=(loop0)
grub> linux /vmlinuz root=/dev/sda3 loop=/ubuntu/disks/root.disk ro quiet slash
grub> initrd /initrd.img
grub> boot

Once booted, run "sudo update-grub" and it works afterwards. (I've no idea why, since there is no apparent change in /boot/grub/grub.cfg). That's what I found on two completey different computers, with fresh 10.04 installs followed by running updates.

Just to reiterate something I found in bug 610898, when I ran the updates I purposely CHOSE to install grub to each MBR that was presented. This had absolutely no effect on the wubi which had been installed to the same partition as windows (file /host/wubildr present). But on the other, it installed grub to the MBR pointing at partition #256 on each device. So I am firmly of the belief that it is related to bug 604417.
I also believe that not selecting any device does not result in any damage.

I think the only thing related to the grub-pc update that needs to change, is that it's too confusing. In one case, a user tried to uninstall grub-pc to prevent 'future problems', not realising that it is still needed. The grub-pc screens need to describe what a bootloader is (or just hide the whole screen for wubi users).

I've heard a couple of users who reinstalled after encountering this issue, so it's not a particular nice welcome to ubuntu.