I was a little confused when reading the simulator directions for the VirtualBox Ubuntu image.
First, I get a warning from the Update Manager indicating "Your Ubuntu release is not supported anymore" and a suggestion to update to 10.04.2 LTS. No big deal.
Second, the commands that you direct me to use are prefixed with a hash (#). In Linux, the hash is typically the indication that you need be logged in as root (or use sudo) in order for the command to execute correctly. The "normal permissions" command line prefix is usually the "$" character. Your screenshots seemed to indicate that sudo-ing wasn't necessary, so I followed the example from the screenshots.
Have you considered using
SyntaxHighlighter on the "Getting Started with the inPulse Simulator" page to help out the copy/paste crowd that isn't used to using the Linux command line?
I also have a general inPulse watch question. Is the one watch button with "button up" and "button down" events the only way to provide physical input from the watch, or am I missing something by not having the watch in front of me?