For the OP and any others having this issue with an update to Lion, here is how I got around it....
1. Make sure you have a backup of your original install in case anything goes wrong (this is critical and had to do numerous Time Machine restores before I figured out the solution).
2. Boot off of Unibeast USB. Select the USB stick at the bootloader.
3. When Unibeast starts the ML installer, do not click continue, instead go to the menu at the top and run terminal.
4. Use the cd command to navigate through the drives. I wont go into the detailed commands but navigate back to Volumes and then to your hard drive where you have your original Lion install.
5. Using the rm command (actually rm -rf xxxxx), delete the /Extras folder. Then delete the /System/Library/Extensions folder (note that I could not delete the whole folder at first due to read only issues, so I used the cd command to go to /System/Library/Extensions and then did a "rm -rf *" to delete everything.
6. Now exit terminal and you are back at the ML installer. Click continue to install ML over your old install. Once it completes reboot.
7. Boot back up off of Unibeast, but this time select your hard drive (I always do a -v so I can see what is going on). The system should not boot into ML off of your hard drive.
8. Now run Multibeast. At this point I no longer got the failure "Installation Failed" as mentioned by the OP. Once Multibeast completes you should be able to reboot and your system should be working with ML.
NOTES:
For me, doing the upgrade was important because I have a server and I did not want to lose all my settings.
I am not sure you have to be so drastic as to delete the entire folders like I mention above, but it saved me a lot of time and the update to ML and re-running Multibeast restored everything anyway.