In case anyone runs in the same weird issue as me and searching for this error:
I just installed Ubuntu 12.10 "Quantal Quetzal" (server) on a small cdrom/floppyless system. I created a bootable usb drive using "unetbootin" (needed to do this from iso image since it didn't know about 12.10 itself).
First of all it appeared that grub was installed on the wrong disk (the usb install drive in stead of the installation disk). I was able to fix this in a second console during installation (chroot to /target, then /usr/sbin/grub-install /dev/)
But after this it failed to boot properly. Even most recovery options didn't work. Everything usually ended in the message
fake initctl called, doing nothing
I wasn't able to fix packages or setup networking through the recovery, but it turned out that
mv /usr/sbin/initctl.REAL /usr/sbin/initctl
fixed my problem. Perhaps some missing last step during the install? If anyone knows more about this, please comment!