2. The old version of XeTeX which comes with TeXLive 2007 had problems with no-sscript option (and some other). Taking a look at the log file you provided, I noticed you have some very old TeX installation. TeXLive2007? E.g. your memoir class package is dated 2005 (mine is 2009), fontspec 2006 v.1.13 (2008, v.1.18 on my installation) and XeTeX is 3.141592-2.2-0.996-patch2 (mine is Version 3.1415926-2.2-0.999.6). So, you may consider upgrading you TeX installation to TeXLive2008 (TeXLive2009 is on the way and is expected to be available soon) or manually updating at least xetex related packages and memoir class (simply copy-paste on their respective places will do). Unfortunately, ubuntu simply skipped TeXLive2008, it's not in repos, so you'll have to install it manually if decide to upgrade.
3. Did you set up LyX to work with XeTeX (created a new format with .pdf extension etc. as explained in the link I provided earlier?)
Let's test the example without lyx. In attachment I provide the same file, this time plain .tex file, so put it on your desktop, open Terminal and enter this command:
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cd ~/Desktop
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xelatex Test.tex
