What does "Fix Committed" mean?

Is it valid if I mark a bug "Fix Committed" if the package in question is hosted upstream (outside of Launchpad)?

example: bug report, committed fix.

"Fix Committed" means developers have figured out a working solution to a problem, and have it merged into their development repositories.

The problem will be delivered in updates when the bug is marked "Fix Released" for your Ubuntu version.

You shouldn't need to do this by hand. If you set a bug watch Launchpad can monitor upstream bug reports and set the status automatically. For this to work the project upstream needs to have it's bug tracker registered in Launchpad. (You can always add more if it's missing)

When you do this Launchpad will then track the bug in Ubuntu and upstream. That makes it easier for developers to find bugs that have been fixed upstream and not yet fixed in Ubuntu.

In your specific case wajig didn't have it's bug tracker registered in Launchpad. I went ahead and did that. Unfortunately the project in Launchpad isn't set to use the external bug tracker. You can probably contact the person who registered it to change it so that it points to the actual upstream wajig tracker, which will make it easy to link bug reports in the future.

Since that STILL doesn't solve your original problem I left a comment in the bug report; which will hopefully point the right people to the problem.

You can find a list of Launchpad bug status definitions the way they are used in the Ubuntu bug tracker at https://wiki.ubuntu.com/Bugs/Status. Normally, for Ubuntu package tasks, "Fix Committed" doesn't correspond to "the fix is upstream but not in Ubuntu yet"; for that you can usually just set a bug watch and let Launchpad deal with it, as Jorge suggested.

Note that some Ubuntu teams assign different roles to certain Launchpad functions, including bug status; this can initially cause some confusion. If you're consistently triaging bugs in a particular component, it's a good idea to familiarize yourself with the way the team responsible for that component does bug triage.

No, Fix Committed is when the fix for said bug has been fixed in the code repository that the project uses.