[ubuntu] How do I install guest additions - I get this error

I recently created an ubuntu natty distro unfortunately the sound was out of synch and no matter what I did I couldn't fix it. I made another thread regarding that.

Anyway I decided to build a new vm using ubuntu 12.10 which I could from the ubuntu website

if I go to devices and install guest additions I get this

Verifying archive integrity... All good.
Uncompressing VirtualBox 4.2.0 Guest Additions for Linux..........
VirtualBox Guest Additions installer
Removing existing VirtualBox DKMS kernel modules ...done.
Removing existing VirtualBox non-DKMS kernel modules ...done.
Building the VirtualBox Guest Additions kernel modules
The headers for the current running kernel were not found. If the following
module compilation fails then this could be the reason.

Building the main Guest Additions module ...done.
Building the shared folder support module ...done.
Building the OpenGL support module ...done.
Doing non-kernel setup of the Guest Additions ...done.
Starting the VirtualBox Guest Additions ...done.
Installing the Window System drivers
Warning: unknown version of the X Window System installed. Not installing
X Window System drivers.
Installing modules ...done.
Installing graphics libraries and desktop services components ...done.
Press Return to close this window...

now after this the mouse is still laggy and widescreen is not enabled, theres no noticible difference. Is this because of the unknown version of the x window system above?

how do I fix this