I decided to rerun after moving the ISO to C:\  as I've noticed that wubi will find ISO's in the root of drives.

However, Wubi died without presenting any meaningful message:

09-06 15:24 INFO   root: === wubi 11.10 rev225 ===
09-06 15:24 DEBUG  root: Logfile is c:\users\bcbc\appdata\local\temp\wubi-11.10-rev225.log
09-06 15:24 DEBUG  root: sys.argv = ['main.pyo', '--exefile="C:\\Users\\bcbc\\Downloads\\wubi-r225.exe"']
09-06 15:24 DEBUG  CommonBackend: data_dir=C:\Users\bcbc\AppData\Local\Temp\pyl302C.tmp\data
09-06 15:24 DEBUG  WindowsBackend: 7z=C:\Users\bcbc\AppData\Local\Temp\pyl302C.tmp\bin\7z.exe
09-06 15:24 DEBUG  WindowsBackend: startup_folder=C:\ProgramData\Microsoft\Windows\Start Menu\Programs\Startup
09-06 15:24 DEBUG  CommonBackend: Fetching basic info...
09-06 15:24 DEBUG  CommonBackend: original_exe=C:\Users\bcbc\Downloads\wubi-r225.exe
09-06 15:24 DEBUG  CommonBackend: platform=win32
09-06 15:24 DEBUG  CommonBackend: osname=nt
09-06 15:24 DEBUG  CommonBackend: language=en_CA
09-06 15:24 DEBUG  CommonBackend: encoding=cp1252
09-06 15:24 DEBUG  WindowsBackend: arch=amd64
09-06 15:24 DEBUG  CommonBackend: Parsing isolist=C:\Users\bcbc\AppData\Local\Temp\pyl302C.tmp\data\isolist.ini
09-06 15:24 DEBUG  CommonBackend:   Adding distro Xubuntu-i386
09-06 15:24 DEBUG  CommonBackend:   Adding distro Xubuntu-amd64
09-06 15:24 DEBUG  CommonBackend:   Adding distro Kubuntu-amd64
09-06 15:24 DEBUG  CommonBackend:   Adding distro Mythbuntu-i386
09-06 15:24 DEBUG  CommonBackend:   Adding distro Ubuntu-amd64
09-06 15:24 DEBUG  CommonBackend:   Adding distro Ubuntu-i386
09-06 15:24 DEBUG  CommonBackend:   Adding distro Mythbuntu-amd64
09-06 15:24 DEBUG  CommonBackend:   Adding distro Kubuntu-i386
09-06 15:24 DEBUG  WindowsBackend: Fetching host info...
09-06 15:24 DEBUG  WindowsBackend: registry_key=Software\Microsoft\Windows\CurrentVersion\Uninstall\Wubi
09-06 15:24 DEBUG  WindowsBackend: windows version=vista
09-06 15:24 DEBUG  WindowsBackend: windows_version2=Windows 7 Home Premium
09-06 15:24 DEBUG  WindowsBackend: windows_sp=None
09-06 15:24 DEBUG  WindowsBackend: windows_build=7601
09-06 15:24 DEBUG  WindowsBackend: gmt=-8
09-06 15:24 DEBUG  WindowsBackend: country=CA
09-06 15:24 DEBUG  WindowsBackend: timezone=America/Vancouver
09-06 15:24 DEBUG  WindowsBackend: windows_username=bcbc
09-06 15:24 DEBUG  WindowsBackend: user_full_name=bcbc
09-06 15:24 DEBUG  WindowsBackend: user_directory=C:\Users\bcbc
09-06 15:24 DEBUG  WindowsBackend: windows_language_code=1033
09-06 15:24 DEBUG  WindowsBackend: windows_language=English
09-06 15:24 DEBUG  WindowsBackend: processor_name=Intel(R) Core(TM) i3 CPU       M 380  @ 2.53GHz
09-06 15:24 DEBUG  WindowsBackend: bootloader=vista
09-06 15:24 DEBUG  WindowsBackend: system_drive=Drive(C: hd 238977.449219 mb free ntfs)
09-06 15:24 DEBUG  WindowsBackend: drive=Drive(C: hd 238977.449219 mb free ntfs)
09-06 15:24 DEBUG  WindowsBackend: drive=Drive(D: cd 0.0 mb free )
09-06 15:24 DEBUG  WindowsBackend: drive=Drive(F: hd 12360.4726563 mb free ntfs)
09-06 15:24 DEBUG  WindowsBackend: drive=Drive(Q: hd 0.0 mb free )
09-06 15:24 DEBUG  WindowsBackend: uninstaller_path=C:\ubuntu\uninstall-wubi.exe
09-06 15:24 DEBUG  WindowsBackend: previous_target_dir=C:\ubuntu
09-06 15:24 DEBUG  WindowsBackend: previous_distro_name=Ubuntu
09-06 15:24 DEBUG  WindowsBackend: keyboard_id=67702793
09-06 15:24 DEBUG  WindowsBackend: keyboard_layout=us
09-06 15:24 DEBUG  WindowsBackend: keyboard_variant=
09-06 15:24 DEBUG  CommonBackend: python locale=('en_CA', 'cp1252')
09-06 15:24 DEBUG  CommonBackend: locale=en_CA.UTF-8
09-06 15:24 DEBUG  WindowsBackend: total_memory_mb=3892.5234375
09-06 15:24 DEBUG  CommonBackend: Searching ISOs on USB devices
09-06 15:24 DEBUG  Distro:   checking Ubuntu ISO C:\ubuntu-11.10-beta1-desktop-amd64.iso
09-06 15:24 ERROR  root: list index out of range
Traceback (most recent call last):
  File "\lib\wubi\application.py", line 56, in run
  File "\lib\wubi\backends\common\backend.py", line 186, in fetch_basic_info
  File "\lib\wubi\backends\common\backend.py", line 737, in find_any_iso
  File "\lib\wubi\backends\common\distro.py", line 108, in is_valid_iso
  File "\lib\wubi\backends\win32\backend.py", line 537, in get_iso_file_names
IndexError: list index out of range