looks like I got the same error.  Just installed Intrepid Ibex to a
flash drive using 'System > Administration > Create a USB Startup Disk'
and attempted to update it from the Update Manager.  It downloaded and
installed many updates, but hung on this one.  Apport caught the crash
and guided me to this page, so I assume I don't need to 'enable apport'
as mentioned above.  Let me know if I can do anything to help.

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package linux-image-2.6.27-7-generic 2.6.27-7.16 failed to install/upgrade: 
subprocess post-installation script returned error exit status 1
https://bugs.launchpad.net/bugs/296496
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