I have created a new project and checked the \"create a local git repository\" option. I opened the organizer to check that there is a repository for my project and it was there
If your project is in /Developer/.... move it elsewhere and reopen the project. This may resolve your problem.
There seems to be a problem under Xcode 4.2 with projects in /Developer/... and git integration (you get the error "The operation could not be performed because no valid working copies were found. Please verify that your files are under source control and try again")