I encountered the same problem (grub error 2) after installing, and this
cost me many hours. I considered recommending Ubuntu for some non-
technical friends, but it seems that this still won't be an option.

Anyway, here is a complete summary:

- I have an internal NVIDIA mirror RAID with Windows on it. Touching that RAID 
or writing anything on it was not an option
- Decided to install Ubuntu to external USB disk
- Installed Ubuntu 8.10 using the alternate installer
- Created 100mb boot partition (sdc1), 100 gig root (sdc5) and 5 gig swap (sdc6)
- Selected "do not install GRUB to default location" and forced install to 
/dev/sdc (the MBR of the external drive)

Then rebooted, and put the external drive before the internal in the
boot order.

Good news: without the external drive, Windows boots, the RAID is completely 
unaffected
Bad news: with the external drive, Grub crashes out with "Error 2"

I have not been able to solve the problem directly in Ubuntu. The UUID
setup GRUB uses now doesn't seem to work properly. The only way I can
boot into my Ubuntu at /dev/sdc at the moment is as follows:

- Boot from supergrubdisk CDROM (ISO image from super grub disk site)
- Fall back to the GRUB command line
- Enter the setup parameters manually:

root (hd2,0)
kernel /vmlinuz-... root=/dev/sdc5 ro quiet
initrd /initrd-...
boot

This gets me into Ubuntu. I have tried putting these commands verbatim
into the GRUB menu file. It doesn't work, I still get the error.

Good luck!

Christian

p.s. I have seen some posts around the Internet from people saying this
bug goes away "if you disable your internal disks" or "if you disable
the RAID array". These are not options, I have important data in my
Windows installlation.

-- 
Grub installs to wrong drive's MBR in default install. No way to change in 
standard installer.
https://bugs.launchpad.net/bugs/46520
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