i'm performing a fresh install, the installation handbook instructs me to use grub-install and that an optional --no-floppy parameter may be passed. i pass this parameter, and yet my console is spewing Buffer I/O error on device fd0, logical block 0 end_request: I/O error, dev fd0, sector 0 errors. blah! :-) i am using the 2005.1 installation media. i believe that grub-install is of version 0.96.
you should be able to work around this by editing /boot/grub/device.map to keep the floppy from being scanned. mine looks like: #(fd0) /dev/fd0 (hd0) /dev/hda
please re-open if grub-0.97-r2 doesnt work for you