Some day, I'll learn to pay attention to the details, I promise. Sorry for the confusion.
Ok, so I reverse merged r977 back in, which mostly applied cleanly.
I then tested this on a natty VM, and, shock, it worked flawlessly.
I think we may also need to have eglibc's postinst skip the call to telinit u, and instead touch /var/run/init.upgraded. Its probably open to debate whether we need to flag users to reboot, though I'd prefer that we do.
One major problem though, is it seems upstart is FTBFS on natty right now. Without any changes, 0.6.7-3 cannot build, as init/test_conf fails, and utils/test_utmp also fails. Will open a bug report for that post-holiday.
I've pushed up a branch, it would be nice if somebody else could test it (I manually disabled test_conf and test_utmp in their respective Makefile.am's and then re-ran automake before building). I will propose the merge after returning from holiday next week.