This may not be the cause of your error, but during the installation of any Linux, you will see things that appear to be errors flash by, but they are expected errors; more like status messages, but unfortunately, the program outputting the errors doesn't know this. What's happening is that the installer if checking for certain hardware, etc. So, it calls a program to look for hardware to see if it's available, and sometimes when it's not, the program outputs an error message. The installer knows this only means the hardware is not there.
As for finding Wubi, well... hopefully you know it isn't run from Windows, it's an option when you cold boot or reset the system - you choose whether to run Windows or Linux, although I have never installed it this way, so I don't know any details.
If you really hate Windows, I'd urge you to consider the normal install of Ubuntu; it will allow you to shrink the Windows partition (or remove it), and install in a newly created partition. It will run better, but the downside is that it's not as easy to go back to Windows-only. If you simply delete it, you will not be able to run windows without restoring the Windows MBR boot record from either a bootable Windows repair disk, or a something bootable with fdisk on it.