If the installation of update-manager caused such a issue, I am
persuaded to believe there were some other problems at hand besides the
error you were getting in the update-manager.  If I were you, I would do
a fresh install of a newer version.  Latest long term support is 10.04
which is supported to 2013.  Yes, you will have to reformat the hard
drive but you can boot a live CD and copy all the /home files from the
broken system, then paste them into the /home of the new install.

One other thing though, when at the screen that gives you the message
"init: re-direct main process (4502) terminated with status 127", press
Ctl+Alt+F1 and see if that opens a fresh terminal for you to enter
commands.

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https://bugs.launchpad.net/bugs/756204

Title:
  package update-manager 1:0.87.31 failed to install/upgrade:
  ErrorMessage: SystemError in cache.commit(): installArchives() failed

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