Comment 1 for bug 141341

:-(

I found a similar case while trying to upgrade a different machine. This one didn't happen until much farther into the upgrade process. Here's the recent transcript:

START TRANSCRIPT

Unpacking replacement libpam-runtime ...
Setting up libpam-foreground (0.4-1) ...

Setting up libpam-runtime (0.99.7.1-4ubuntu3) ...

(Reading database ... 227548 files and directories currently installed.)
Preparing to replace libpam0g 0.79-4ubuntu2 (using .../libpam0g_0.99.7.1-4ubuntu3_i386.deb) ...
Unpacking replacement libpam0g ...
Setting up libpam0g (0.99.7.1-4ubuntu3) ...
debconf: unable to initialize frontend: Dialog
debconf: (Dialog frontend will not work on a dumb terminal, an emacs shell buffer, or without a controlling terminal.)
debconf: falling back to frontend: Readline
Checking for services that may need to be restarted...Checking init scripts...
Configuring libpam0g
--------------------

Most services that use PAM need to be restarted to use modules built for this
new version of libpam. Please review the following space-separated list of
init.d scripts for services to be restarted now, and correct it if needed.

Among the services that require restarting are the display managers kdm, wdm,
and xdm. If you are upgrading from within an X session started with one of
these display managers, restarting that service will terminate your X session.
It is recommended that you remove that service from the list here and restart it
later at your convenience.

Some other services such as xscreensaver, gnome-screensaver, and xlockmore
cannot be restarted for you. You will not be able to authenticate to these
services until you restart them manually.

Services to restart for PAM library upgrade: