You need to give the full path to insmod:
 sudo insmod 
/lib/modules/2.6.38-8-generic/kernel/drivers/gpu/drm/radeon/radeon.ko

About upgrading to 11.04 final: I think the kernel is the same,
2.6.38-8.42.

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https://bugs.launchpad.net/bugs/763909

Title:
  11.04 Wont Boot With Mobility Radeon HD 3400

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