It looks like the problem is with this line in the "arduino" launch script:
APPDIR="$(dirname -- $(readlink -f -- "${0}") )"
This is supposed to figure out what directory the arduino software is in, even if the "arduino" script is a symbolic link. It looks like readlink isn't returning something that dirname can handle. Anyone have an idea of how to change it? I'd suggest posting follow-ups on the Google Code issue list (Google Code Archive - Long-term storage for Google Code Project Hosting.) so they don't get lost.