Anyway the GUI shouldn't be prompting you to create /var/lib/bitcoin, it should be $HOME/.bitcoin instead, so I think that's a bug. I'll take a look at that this evening. /var/lib/bitcoin is meant to be used by the server.
Yes, I've set ~/.bitcoin for the datadir. bitcoind still wants to use /var/lib/bitcoin even once bitcoin-qt has set datadir to ~/.bitcoin, and Armory reports stderr output from bitcoind that bitcoin.conf should be created at /var/lib/bitcoin/ with RPC user and password set. So I'm currently using Armory with bitcoin-qt to serve the blocks to it, instead of Armory launching bitcoind itself from /usr/sbin.
What's the purpose of /etc/bitcoin and /var/lib/bitcoin? bitcoind wallet in one and block data in the other?
The (no-GUI) server uses these directories so that SELinux policies can be applied to restrict access to the Bitcoin configuration and wallet in server scenarios. This can't be done effectively if Bitcoin's data is in a user home directory.
Anyway I found the bug (it was something really obvious and stupid) and I'm rebuilding Bitcoin now. Though it will take a couple of hours before all the builds finish.