I saw this problem when I upgraded from dapper to edgy. According to packages.ubuntu.com dapper has xfonts-utils 6.8.2.1-5 and update-fonts-dir from this package doesn't understand --x11r7-layout yet.
When edgy gets released people will run into this problem if xfonts- utils isn't upgraded before gsfonts-x11. -- insufficient dependency on xfonts-utils https://launchpad.net/bugs/52803 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs
