O-P
Originally partitioned new disk with the pccontrol disk utility.
I've done that many times, and have never seen such behavior. There has to have been more to it than that. Either you did something unusual, or the image download, or burn, was less than bit perfect.
For what it's worth, I dislike any tool that tries to do too many lobs, all at the same time. For the most part, I use Linux fdisk to create my partitions, mkfs -t <filesystem-type> -L <label> /dev/<whatever> to format the regular partitions, and mkswap -L <label> /dev/<whatever> to format the swap partition, prior to doing the actual installation.
O-P
I remember when partitioning the new disk, In one of the pulldowns, I did not check the boot flag entry. Once the disk was formatted
the original result (no boot flag on sdb1) and 3 additional ghost partitions with boot flags. Is this a bug in the pcc disk utility or am I the bug causing the problem?

Could be...

I just did a VBox VM installation, using the GUI installer to do the partitioning, formatting and labeling. I even created a /home partition, which is something I usually don't do. From a terminal on that installation I get this;
[root@localhost polack]# fdisk -lDisk /dev/sda: 17.2 GB, 17179869184 bytes
255 heads, 63 sectors/track, 2088 cylinders, total 33554432 sectors
Units = sectors of 1 * 512 = 512 bytes
Sector size (logical/physical): 512 bytes / 512 bytes
I/O size (minimum/optimal): 512 bytes / 512 bytes
Disk identifier: 0xa320ed0c
Device Boot Start End Blocks Id System
/dev/sda1 2048 4196351 2097152 82 Linux swap / Solaris
/dev/sda2 4196352 16779263 6291456 83 Linux
/dev/sda3 16779264 33554431 8387584 83 Linux
No boot flag and no ghost partitions. Going further, I also get this;
[root@localhost polack]# blkid/dev/sda2: UUID="f2cca89b-a06d-4957-b5a3-f1b329bfbb56" TYPE="ext4"
LABEL="phoenix" /dev/sda1: UUID="6c04d840-229b-426d-a19b-1ccca65c43f5" TYPE="swap"
LABEL="swap" /dev/sda3:
LABEL="home" UUID="c1bbac33-ed56-4a14-969c-22733131200c" TYPE="ext4"
[root@localhost polack]# cat /etc/fstab# Entry for /dev/sda2 :
LABEL=phoenix / ext4 defaults 1 1
# Entry for /dev/sda3 :
LABEL=home /home ext4 defaults 1 2
none /proc proc defaults 0 0
# Entry for /dev/sda1 :
LABEL=swap swap swap defaults 0 0
none /dev/pts devpts defaults 0 0
Share /home/polack/Desktop/Share vboxsf defaults 0 0
[root@localhost polack]# cat /boot/grub/menu.lsttimeout 10
color black/cyan yellow/cyan
gfxmenu (hd0,1)/boot/gfxmenu
default 0
title Phoenix2
kernel (hd0,1)/boot/vmlinuz BOOT_IMAGE=Phoenix2
root=LABEL=phoenix vmalloc=256M acpi=on
resume=LABEL=swap splash=verbose vga=791
initrd (hd0,1)/boot/initrd.img
title Phoenix nonfb
kernel (hd0,1)/boot/vmlinuz BOOT_IMAGE=Phoenix_nonfb
root=LABEL=phoenix vmalloc=256M acpi=on
resume=LABEL=swapinitrd (hd0,1)/boot/initrd.img
title failsafe
kernel (hd0,1)/boot/vmlinuz BOOT_IMAGE=failsafe
root=LABEL=phoenix failsafe vmalloc=256M acpi=on
initrd (hd0,1)/boot/initrd.img
[root@localhost polack]#