Thanks for your report.
The cause of the failure is
=====
2008-11-06 04:17:11,226 DEBUG The package 'postgresql-plperl-8.2' is marked for
removal but it's in the removal blacklist
2008-11-06 04:17:20,865 ERROR Dist-upgrade failed: 'An essential package would
have to be removed'
=====
This is fixed in update-manager 1:0.95.1 .
If the upgrade still fails the workaround is to uninstall postgresql-plperl-8.2
before trying to upgrade.
** Changed in: update-manager (Ubuntu)
Status: New => Fix Released
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upgrade 8.10 tool failes because it cannot calculate upgrade
https://bugs.launchpad.net/bugs/294134
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