I had the same problem. The update tool showed a dpkg error in
subprocess while removing old packages such as old kernel etc. Then it
crashed. In fact old kernel 2.6.17-11 was removed, but GRUB was not
amended accordingly.

Booting with 2.6.17-10 was possible, perhaps the update tool was crashed
before removing 2.6.17-10. But, restricted-modules for 2.6.17-10 were
not installed. I was a bit in trouble to fix this, because WLAN was not
working and manuals for editing GRUB are usually found in the web.

Since I´m lazy I installed the restricted-modules for 2.6.17-10 from the
Install-CD of 6.10 and thereafter with working WLAN I reinstalled the
new kernel 2.6.20 whereas GRUB was updated correctly.

-- 
Kernel Panic after reboot
https://launchpad.net/bugs/96196

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