It finds vboxdrv now.

However, now VirtualBox reports the following error:

VirtualBox can't operate in VMX root mode. Please disable the KVM kernel 
extension, recompile your kernel and reboot.
VBox status code: -4011 (VERR_VMX_IN_VMX_ROOT_MODE).

Does this mean I can't have kvm installed in parralel or does it mean that the 
new kernel has been compiled with something that virtualbox can't handle?
I'm using the standard kernel:
Linux pascal-laptop 2.6.27-7-generic #1 SMP Fri Oct 10 03:55:24 UTC 2008 i686 
GNU/Linux

-- 
Should ship new kernel modules at same time as new kernel
https://bugs.launchpad.net/bugs/253831
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