Reinstalled Natty this morning. Same problems. Setting radeonmodest=0 doesn't help and it is impossible to boot into a text console - even recovery mode freezes with a black screen of death. I chrooted and modified the sources.list file as suggested in the tutorial and this time I was able to do an apt-get update and upgrade without error. However, I am unable to install the new kernel as I get dependency errors. I've tried force upgrading but that doesn't work either. Here is the relevant terminal output:

dpkg: dependency problems prevent configuration of linux-image-generic:
 linux-image-generic depends on linux-image-2.6.38-9-generic; however:
  Package linux-image-2.6.38-9-generic is not configured yet.
dpkg: error processing linux-image-generic (--configure):
 dependency problems - leaving unconfigured
dpkg: dependency problems prevent configuration of linux-generic:
 linux-generic depends on linux-image-generic (= 2.6.38.9.23); however:
  Package linux-image-generic is not configured yet.
dpkg: error processing linux-generic (--configure):
 dependency problems - leaving unconfigured
Setting up linux-headers-2.6.38-9 (2.6.38-9.43) ...
No apport report written because the error message indicates its a followup error from a previous failure.
No apport report written because the error message indicates its a followup error from a previous failure.
Setting up linux-headers-2.6.38-9-generic (2.6.38-9.43) ...
Examining /etc/kernel/header_postinst.d.
run-parts: executing /etc/kernel/header_postinst.d/nvidia-common 2.6.38-9-generic /boot/vmlinuz-2.6.38-9-generic
pcilib: Cannot open /proc/bus/pci
Setting up linux-headers-generic (2.6.38.9.23) ...
Processing triggers for python-support ...
Processing triggers for libc-bin ...
ldconfig deferred processing now taking place
Errors were encountered while processing:
 linux-image-2.6.38-9-generic
 linux-image-generic
 linux-generic
E: Sub-process /usr/bin/dpkg returned an error code (1)
root@ubuntu:/# apt-get -f dist-upgrade
Reading package lists... Done
Building dependency tree       
Reading state information... Done
Calculating upgrade... Done
0 upgraded, 0 newly installed, 0 to remove and 0 not upgraded.
3 not fully installed or removed.
After this operation, 0 B of additional disk space will be used.
Do you want to continue [Y/n]? y
Can not write log, openpty() failed (/dev/pts not mounted?)
Setting up linux-image-2.6.38-9-generic (2.6.38-9.43) ...
Running depmod.
update-initramfs: Generating /boot/initrd.img-2.6.38-9-generic
df: Warning: cannot read table of mounted file systems
Examining /etc/kernel/postinst.d.
run-parts: executing /etc/kernel/postinst.d/initramfs-tools 2.6.38-9-generic /boot/vmlinuz-2.6.38-9-generic
run-parts: executing /etc/kernel/postinst.d/nvidia-common 2.6.38-9-generic /boot/vmlinuz-2.6.38-9-generic
pcilib: Cannot open /proc/bus/pci
run-parts: executing /etc/kernel/postinst.d/pm-utils 2.6.38-9-generic /boot/vmlinuz-2.6.38-9-generic
run-parts: executing /etc/kernel/postinst.d/update-notifier 2.6.38-9-generic /boot/vmlinuz-2.6.38-9-generic
run-parts: executing /etc/kernel/postinst.d/zz-update-grub 2.6.38-9-generic /boot/vmlinuz-2.6.38-9-generic
/usr/sbin/grub-probe: error: cannot find a device for / (is /dev mounted?).
run-parts: /etc/kernel/postinst.d/zz-update-grub exited with return code 1
Failed to process /etc/kernel/postinst.d at /var/lib/dpkg/info/linux-image-2.6.38-9-generic.postinst line 1010.
dpkg: error processing linux-image-2.6.38-9-generic (--configure):
 subprocess installed post-installation script returned error exit status 2
dpkg: dependency problems prevent configuration of linux-image-generic:
 linux-image-generic depends on linux-image-2.6.38-9-generic; however:
  Package linux-image-2.6.38-9-generic is not configured yet.
dpkg: error processing linux-image-generic (--configure):
 dependency problems - leaving unconfigured
dpkg: dependency problems prevent configuration of linux-generic:
 linux-generic depends on linux-image-generic (= 2.6.38.9.23); however:
  Package linux-image-generic is not configured yet.
dpkg: error processing linux-generic (--configure):
 dependency problems - leaving unconfigured
No apport report written because the error message indicates its a followup error from a previous failure.
No apport report written because the error message indicates its a followup error from a previous failure.
Errors were encountered while processing:
 linux-image-2.6.38-9-generic
 linux-image-generic
 linux-generic
E: Sub-process /usr/bin/dpkg returned an error code (1)
root@ubuntu:/#