You probably just didn't have a proper restricted-modules package
installed, which meant that it didn't have the nvidia module for the new
kernel.
** Changed in: linux-restricted-modules-2.6.20 (Ubuntu)
Sourcepackagename: xorg-server => linux-restricted-modules-2.6.20
Status: New => Invalid
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After automatic update only old kernel works.
https://bugs.launchpad.net/bugs/92808
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