I took a quick look, and think you maybe need to do some editing.
First code box "Preparation":
# Prepare source
mounts -o loop iso/ubuntu-10.04.1-desktop-amd64.iso /mnt/iso1/
# Prepare destination, HD/USB
mount /dev/sdb2 /mnt/usbpen/
doesn't have an "s"
The path iso/ubuntu-10.04.1-desktop-amd64.iso
You don't specify filesystem type to mount
, which may be necessary if the intended reader isn't running ubuntu 10.04 already (which is likely).
You haven't suggested that the mountpoints need to be created before the mount command is issued
I gave up here
Good try though
You don't really need this "HOWTO" because ubuntu 10.04's installation program will automatically include other OSs on other partitions, and offer multiboot "out of the box". No "tweaking" required