Same problem here. Tried SO many combinations... But, I'm not using ubuntu (or don't think I am...)
Will try the older library.
Ok. Tried that. No luck. Anyone solve this?
And soforth. No luck.
Also, I notice that this library is INCLUDED in the standard Processing package: http://processing.org/reference/libraries/
So why do I have to hurt?
So. I GOT IT WORKING FINALLY!!!!
How? Forget about directories. I kept trying different combinations, caps, versions, etc. No luck. I noticed that I couldn't see the arduino library in "Sketch -> Import Library" (again, even though supposedly this library comes installed with Processing). Beneath that menu choice there's an "add file". I browsed to the latest arduino.jar, and that did the trick. Did this move the file somewhere? Dunno..