I've updated desktop to 11.10 (qemu 0.14.1) which got rid of the qemu segfault. Now it always errors out after vmlinuz copying (at least on nemo kernel with different combinations of meego/nothing firmware, kubunutu 11.10/kubuntu daily/mobile, selected defaults from nemo/only kernel):

`/media/source/vmlinuz' -> `/mnt/vmlinuz'
chroot: failed to run command `/tmp/install-chroot-part.sh': No such file or directory
cp: cannot stat `/mnt/boot.scr': No such file or directory

Going to retry from bzr branch.