Comment 19 for bug 219192

I don't know the extent this would help you guys, but ...

Short version: I (and others, but not everyone) found that to make this work best, and specifically to ensure persistence, it helps to use ext3 for the casper-rw partition (and I have used ext3 for both partitions this time with 8.04: the root partition kubuntu804 and casper-rw). (I first got the tip from K0LO @ Kubuntu forums.)

Here's the notes on that, as well as other workarounds:
https://bugs.launchpad.net/ubuntu/+source/upstart/+bug/125702

(do this, in addition to fixing the bug we are talking about here with BusyBox)