I think I have experienced this problem upgrading from 'hardy' to 'intrepid'.
It seems that the grub update step isn't synchronised with the installation of the new kernel, and the generation of a new initramfs. In my case, I ended up with a menu.lst that listed the new kernel, but did not have a corresponding initrd line for it. The menu.lst was generated at a time when the kernel image was there, but the initramfs had not yet been created. The new kernel would not boot. Fortunately an old one would.
I think I have experienced this problem upgrading from 'hardy' to 'intrepid'.
It seems that the grub update step isn't synchronised with the installation of the new kernel, and the generation of a new initramfs. In my case, I ended up with a menu.lst that listed the new kernel, but did not have a corresponding initrd line for it. The menu.lst was generated at a time when the kernel image was there, but the initramfs had not yet been created. The new kernel would not boot. Fortunately an old one would.