The error is because installing the grub package does not configure the
bootloader; if you select a non-default bootloader for installation, you
must also configure it by hand, or else the system has no way to ensure
updated kernels (such as security updates) will be booted by default.

> I wanted to updated grub as Xubuntu overwrote the PClinuxOS entries.

Switching from grub2 (the default) to grub1 won't help with this.  If
you need two OSes installed on different partitions to both be able to
update their boot entries independently, the standard way to handle this
is to have one or the other of them install the boot block to a
partition instead of to the disk's MBR and use "chainloader"
functionality to select this OS when wanted.  If you need assistance
configuring this, please see http://www.ubuntu.com/support for
information about available support options for Ubuntu.

To correct the immediate package upgrade problem, it is recommended that
you reinstall grub2 by running 'sudo apt-get install grub-pc' from a
terminal.

Closing this report, as this is not a bug.

** Changed in: grub (Ubuntu)
       Status: New => Invalid

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https://bugs.launchpad.net/bugs/697500

Title:
  package linux-image-2.6.32-27-generic 2.6.32-27.49 failed to install/upgrade: 
subprocess installed post-installation script returned error exit status 1 .

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