Ok so this is strange. I had the problem twice and as i am working on a VM i just always reverted to the latest snapshot.
Because i wanted to document it for you i turned on logging in putty into a file and relaunched setup after again reverting to that same snapshot.
And for whatever reason, probably due to Murphy, it went through.
But after a reboot i am not in AVWIZARD but i have the graphical login manager. After logging in i have an error popup "Failed to load session 'ubuntu'" with only one button to choose which is labeled "Log Out". And it does exactly this. Once i click it i am back in graphical login.
One special thing is that in /etc/pluto.conf i had set AutostartMedia=0 to only start CORE but no Orbiter / MD and whatsoever since this is a dev machine on an ESXi server where i only connect via SSH for development. But my private production core for example has the same settings as it sits in a server room in the cellar, and i don't need an Orbiter.
I guess there are other peoples out there running a headless core, so this should be taken into account ?
But my system is 12.04.2 LTS now. Thanks for this.
I still have all my snapshots, so i can do another test for you at any time.