There is an updated version of Wubi (version 129) available at:
http://releases.ubuntu.com/jaunty/wubi.exe
That works OK for me.
Given that this problem has been addressed, and that the trouble with the absence of persistent storage in USB disks generated with USB startup disk creator has been widely reported, I hope that an appropriate update will be forthcoming soon. Maybe 9.04 was pushed out a few days too soon.
In fairness, once the installation hurdles are past, 9.04 is a Good Thing.
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