I recently tried to do something like this to install Debian (already having Ubuntu on this computer) without using a USB drive or blank CD. Didn't succeed. So I'm glad to see this submission; I'll probably try it out in the near future.
Try network boot. Setup a pxe environment and you should be good to go.
Another solution is use debootstrap to install Debian or Ubuntu to a plain directory. Be aware that you have to make some adjustments to the system (like installing a bootloader/kernel/adjust fstab etc.) after executing debootstrap. You can also use grml-debootstrap which automatically executes the needed steps to make a system bootable.
