For others that are having this problem (I assume you fixed it since you're a Linux guru):
To prevent it from fubar'ing your networking during install, try killing the network manager before install:
Get the process IDs to kill:
ps -A | grep Network
Then kill each process by it's PID (run this twice, replacing <PID HERE> with each PID, one at a time):
kill <PID HERE>
Then restart your network:
sudo /etc/init.d/networking restart
Then install LinuxMCE! Using this method shouldn't require applying updates prior to LinuxMCE installation:
1) Install and boot Kubuntu Feisty
2) Kill network manager
3) Restart network manager
4) Install LinuxMCE