The kernel on the current install media (install-amd64-minimal-20101118) is compiled with CONFIG_USB_STORAGE_DEBUG=y. This has the nasty side-effect of completely overwriting the kernel log buffer with junk when booting from a USB cdrom drive. I don't think debugging usb-storage is something you would usually carry out with install media. On the other hand, this pretty much requires attaching an ATA cdrom drive to the machine if you need to take a look at any part of the boot log while installing; there are situations (netbooks, some rack-mounted servers) where this is not practical or feasible.
Thanks or the bug report. I've dropped the kernel option from the kconfig file. This should be fixed on next build run. I'm leaving the bug open until then.
Seems I forgot to close this bug.