The method that I used on Ubuntu 10.04 did not seem to work, and the control panel does not seem to have the options available on this laptop, so I had to figure out another way to do it.
After reading on how to change some other power manager settings, I came up with a command that changes the settings I want to change. However this just changed it when my user was logged in to the console, to change the default required the commands I had used before and a restart to gdm to load the changed settings.
# make the changes sudo gconftool-2 \ --direct --config-source xml:readwrite:/etc/gconf/gconf.xml.defaults \ /apps/gnome-power-manager/buttons/lid_ac --set --type string nothing sudo gconftool-2 \ --direct --config-source xml:readwrite:/etc/gconf/gconf.xml.defaults \ /apps/gnome-power-manager/buttons/lid_battery --set --type string nothing # restart gdm sudo /etc/init.d/gdm restart
The current settings can be viewed with
gconftool-2 /apps/gnome-power-manager/buttons -R
Now the laptop does not suspend when the cover is closed.