update-grub ignores submenu entries

yesterday I tried installing natty (11.04) on my old laptop (it's one I bought late 2002). I was unable to boot the install CD's of xubuntu 11.04 and also linux mint LXDE with a similar problem.

I then tried 10.04.2 xubuntu and I was able to normally install on the laptop.

Then I proceeded to upgrade to 10.10 and it booted fine after upgrading.

Next I tried upgrading to 11.04, which also went find, except I was again unable to boot using the natty kernel. Selecting the older kernel from 10.10 worked ok. I think I saw some glitch on the startup screen, but otherwise it seems to work ok.

I'd like to use the proper kernel for this release, is there some option I might try to add to the kernel commandline to start it on my old laptop?

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some info:

$ cat /proc/cpuinfo
processor : 0
vendor_id : GenuineIntel
cpu family : 15
model : 2
model name : Mobile Intel(R) Pentium(R) 4 - M CPU 1.80GHz
stepping : 7
cpu MHz : 1200.000
cache size : 512 KB
fdiv_bug : no
hlt_bug : no
f00f_bug : no
coma_bug : no
fpu : yes
fpu_exception : yes
cpuid level : 2
wp : yes
flags : fpu vme de pse tsc msr pae mce cx8 mtrr pge mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm pbe up pebs bts cid
bogomips : 2393.15
clflush size : 64
cache_alignment : 128
address sizes : 36 bits physical, 32 bits virtual
power management:
$ lspci
00:00.0 Host bridge: Intel Corporation 82845 845 [Brookdale] Chipset Host Bridge (rev 04)
00:01.0 PCI bridge: Intel Corporation 82845 845 [Brookdale] Chipset AGP Bridge (rev 04)
00:1d.0 USB Controller: Intel Corporation 82801CA/CAM USB Controller #1 (rev 02)
00:1d.1 USB Controller: Intel Corporation 82801CA/CAM USB Controller #2 (rev 02)
00:1e.0 PCI bridge: Intel Corporation 82801 Mobile PCI Bridge (rev 42)
00:1f.0 ISA bridge: Intel Corporation 82801CAM ISA Bridge (LPC) (rev 02)
00:1f.1 IDE interface: Intel Corporation 82801CAM IDE U100 Controller (rev 02)
00:1f.3 SMBus: Intel Corporation 82801CA/CAM SMBus Controller (rev 02)
00:1f.5 Multimedia audio controller: Intel Corporation 82801CA/CAM AC'97 Audio Controller (rev 02)
00:1f.6 Modem: Intel Corporation 82801CA/CAM AC'97 Modem Controller (rev 02)
01:00.0 VGA compatible controller: nVidia Corporation NV17 [GeForce4 420 Go] (rev a3)
02:00.0 FireWire (IEEE 1394): VIA Technologies, Inc. VT6306/7/8 [Fire II(M)] IEEE 1394 OHCI Controller (rev 46)
02:01.0 Ethernet controller: Realtek Semiconductor Co., Ltd. RTL-8139/8139C/8139C+ (rev 10)
02:04.0 CardBus bridge: O2 Micro, Inc. OZ6933/711E1 CardBus/SmartCardBus Controller (rev 01)
02:04.1 CardBus bridge: O2 Micro, Inc. OZ6933/711E1 CardBus/SmartCardBus Controller (rev 01)
02:06.0 System peripheral: Toshiba America Info Systems TC6371AF SmartMedia Controller (rev 02)