Comment 9 for bug 563265

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JorgeT (jorget) wrote : Re: package nvidia-current 195.36.15-0ubuntu2 failed to install/upgrade: nvidia-current kernel module failed to build / make[2]: *** No rule to make target `modules'. Stop.

I had solved my problem installing the kernel sources/headers and manually installing the nvidia-185 driver. Exactly I have executed the following commands:

sudo apt-get install linux-headers-2.6.32-22-generic (this was the key, the package that should be installed automatically in the update)
sudo apt-get remove --purge nvidia*
sudo apt-get install nvidia-185-kernel-source
sudo apt-get install nvidia-185-modaliases
sudo nano /etc/modprobe.d/blacklist.conf
(added the folowing lines to the end
blacklist vga16fb
blacklist nouveau
blacklist rivafb
blacklist nvidiafb
blacklist rivatv
)
sudo nvidia-xconfig

And it works perfectly, includng vdpau. XBMC now works like a charm.

I hope that this help somebody else.