Let's say someone installs Intrepid 8.10 Alpha 1 with kernel 2.6.26-2-generic. After installing (which presumably went well), they upgrade and get a new 2.6.26-2-generic kernel (remember, newer kernels don't always bump the "2" ABI). Upon rebooting, they discover this new kernel doesn't work for them. What now? There is no longer an older kernel to boot to.
Enter "last-good-boot". A new mechanism now in development that will save away the kernel+initrd+modules for the last time your system booted successfully.
It will add this as an entry in grub for visibility.
Currently there are packages in a PPA:
deb http://ppa.launchpad.net/ben-collins/ubuntu intrepid main
deb-src http://ppa.launchpad.net/ben-collins/ubuntu intrepid main
It includes the module-init-tools and grub changes needed to test. After installing these packages, you will need to reboot in order to get your first last-good-boot.