Hi,
Still trying to get libguestfs appliance test to work on Ubuntu Lucid.  I figured out my umask was causing problems and fixed that.  now I'm on to a new problem.  libguestfs-test-tool reports the following:

febootstrap: mounting new root on /root
febootstrap: chroot
/proc/uptime: No such file or directory
execl: /init: No such file or directory
febootstrap: debug: listing directory /
    2 d .                040755 4096 88619:5000
    2 d ..               040755 4096 88619:5000
   11 d lost+found       040700 16384 0:0
   12 d bin              040755 4096 23083:5000
   13 d boot             040755 4096 23083:5000
   14 d etc              040755 4096 23083:5000
  109 d lib              040755 4096 23083:5000
  156 d sbin             040755 4096 23083:5000
  157 d usr              040755 4096 23083:5000
  534 d var              040755 4096 23083:5000
 3701 - init             100750 3264 23083:5000

Note, init is indeed a file (a shell script).  I checked the root and initrd images, and they both have init (the initrd has an init binary, the root has a shell script that starts udev etc).