You will need to download an image into this directory..
Will also need to update the tests to reference this new image.

You could use e.g. the Ubuntu Natty cloud images (this matches the sample configuration):
$ wget http://cloud-images.ubuntu.com/releases/natty/release/ubuntu-11.04-server-cloudimg-amd64.tar.gz
$ tar xvzf ubuntu-11.04-server-cloudimg-amd64.tar.gz