I'm experiencing exactly the same bug since I upgraded from 8.04 to
9.04. It's quite annoying that I can't modify the system time, before
this bug was introduced I didn't realise how often I look at the clock
:-)

I'm using the 2.6.28-6-386 kernel. A newer kernel was not proposed by
the update manager. I assume there is no *-386 version of the 2.6.28-11
kernel in the repositories.

Luckily there is a work-around available to change the time: The time
can be changed by going to "system > administration > time and date".

This worked for me, and at least one other person, see
http://ubuntuforums.org/showthread.php?t=1091229

-- 
On time set via gnome-panel, "/sbin/hwclock returned 256"
https://bugs.launchpad.net/bugs/207902
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