Comment 33 for bug 478274

I also have the same problem, checked everything as stated here:
a) Don't have SVN and .svn folder
b) Have custom.conf as stated here
My box info (let me know if I have to add something)
Distributor ID: Ubuntu
Description: Ubuntu 9.10
Release: 9.10
Codename: karmic
Linux 2.6.31-21-generic #59-Ubuntu SMP Wed Mar 24 07:28:56 UTC 2010 i686 GNU/Linux

Inserted an USB thumb drive and it appears as USB0, it states is unable to set permissions (but it can "read" as it shows the contents but to delete/copy/create folders the only way I had to do it is by "remounting" it as root.

Please advise