I had this same problem and realized that if i kept using 2.6.24-11-386
the nvidia kernel module kept working. It seems there is some
incompatibility with the nvidia kernel module with 2.6.24-12-386 and
2.6.24-12-generic both kernel images give errors when trying to manually
do a modprobe nvidia. The error isn't very informative and just says
fatal error installing nvidia module. I went back to 2.6.24-11-386 for
my main kernel and the nvidia module is working and now I have 3d again.
I'm using a 8400m GS on my laptop.

-- 
ubuntu Hardy Heron update on mar 10 evening.  wiped out nvidia
https://bugs.launchpad.net/bugs/200847
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