Disabling hibernate for the whole system is done with change to policykit configuration. You can follow the directions here if you’re just doing this as a one-time thing, but if you want to modify this in a distro or for your organization, you need a way to apply a global override without hand-editing XML. I searched for a command-line tool for this in Ubuntu 11.10 (oneiric), but came up empty. Instead, I used the mechanism defined in the pklocalauthority manpage. This is what the file looks like:
You place this file in /etc/polkit-1/localauthority/**hierarchy**/. I called it disable-hibernate.pkla. Refer to the manpage to decide which value for **hierarchy** suits your use case best. Since the session indicator in Ubuntu checks this setting before building the menus, once you disable this, the Hibernate menu option will also disappear.