Mcr10001- I ran into the same problem, posts from a mailing list suggest it's due to the version of live-build you have installed. Hope that helps a little.
I've been attempting to build a non-PAE i386 image, using a virtual machine running a fresh kali-1.0.6 install, amd 64. I've also tried building with the virtual machine being 32 bit. I've performed all the "update/upgrade/dist-upgrade" procedure on the virtual machines, but they both end up giving me an error "Errors were encountered while processing: dradis, dpkg returned an error (-1)". (At the end of the live-build attempt). The only thing I could find through google was an old post about Backtrack giving that error, I wasn't able to make much from it.
I was just hoping that someone else has gotten this error and could point me in the right direction.