From: Miles Fidelman <mfidelman@ntcorp.com>
I just build a USB key containing the squeeze installer, based on the bits currently linked from the debian testing installer page.
After booting, the installer starts up, but when it gets to the point of looking for a .iso image, it reports mounting and scanning both my hard drives (/dev/sda and /dev/sdb) and the usb stick (/dev/sdc1) - but then reports not finding any .iso files. It then asks if I want to do a more thorough search - which exhibits the same failure.
As far as I can tell, by escaping to a shell, it has mounted the USB stick (as /hd-media) and there's a .iso image listed under /hd-media.
Miles, that happened to me also then I noticed I was using lenny's boot.img.gz file to create the usb. Then I downloaded this one and worked fine for me: http://http.us.debian.org/debian/dists/testing/main/installer-i386/current/images/hd-media/boot.img.gz