Well, I'm even more convinced this is a problem that has something to do with later kernels.
I've tried both 32-bit and 64-bit xubuntu 11.10 installations and they both do exactly the same. Installation starts fine, hardware detected (including 500Gb SATA drive) but as soon as the installation attempts to write to the disk I get "input/output error during write on /dev/sda"
So I tried an xubuntu 10.04 installation and that works OK with no problems.
As I said originally (before I tried re-installing) the old 10.04 installation booted OK if I selected an older (2.6.32) kernel but failed to boot with the latest (2.6.35) kernel.
This suggests to me that something in the kernel has changed and has broken the drivers for the VIA VT2620 controller. However I can't find anything that seems directly relevent by Googling.
If anyone has any bright ideas or suggestions they would be very welcome.