Re-opening this bug, as it's not quite fixed in Jaunty.
<cjwatson> oh, bah, I see the problem; /target isn't mounted yet when
the code runs in which I added this logic
As such, this is going to need to be a release note for Jaunty.
* Ubuntu 8.10 (Intrepid) users with existing encrypted-private setups
are advised to use update-manager when upgrading to Ubuntu 9.04
(Jaunty), rather than the LiveCD.
:-Dustin
** Changed in: user-setup (Ubuntu)
Status: Fix Released => Triaged
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should not remove ecryptfs-utils when in use
https://bugs.launchpad.net/bugs/361627
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