The Python version in Ubuntu has been raised to 2.6 and Deluge appears to be bound to something much older. I say much older because the deprecation messages at runtime are errors, not warnings, meaning they've been around as warnings for some time.
That traceback is actually not very informative due to a bug in the exception handler which has been fixed in 1.1.4. I also believe that this is most likely a packaging issue, Deluge runs perfectly fine using python 2.6 (I've been using 2.6 for a while) and I believe that there are quite a few things broken in Jaunty at the moment. You should probably file a bug on Launchpad, also maybe request a version bump.