First off, this is a new behavior, documented in the 11.10 release notes, that I actually developed together with Scott Moser as an effort to make server boot more reliable.
Commenting out lo will mean you have no "local" network capability, which will break some programs when they try to use the network. It will also cause your system to never boot because it is so critical. So leave these two lines:
iface lo inet loopback
The bits about eth0 meant that your machine was configured to wait for a dynamic address to be assigned to it before the netowrk is considered "UP". In pre-upstart versions of Ubuntu (8.10 and earlier), the system would have waited up to 60 seconds for this before continuing the boot. When upstart was added, this condition wasn't waited for anymore, because network interfaces that were not always expected to be plugged in are better managed by something like network-manager.
So, if you have a server, you probably want to wait for a dynamic address, otherwise the system will boot without all of its networks available (which it does if it takes more than 2 minutes to get an address). If you have a laptop that you don't always expect to be plugged in to eth0, then configure eth0 in network manager, and remove only those lines from /etc/network/interfaces, which should get rid of your boot delay.
Keep in mind, there's a known bug with VMware and dbus that also causes this message: