i had the same problem - i fixed it like this:

  1. check / fix filesystem on your root partition
  2. boot from your harddisc but chose "recovery mode"
  3. when it gets to the error message again, press ESC to get a prompt up
  4. remount your root partition as read/write
  5. check your networking
  6. reinitiate the upgrade procedure


Step 1 - fix filesystem

Boot ubuntu or anything with GParted from a liveCD or liveUSB stick
Run System->Administration->Gparted or System->Adminstration->Partition Editor depending on what it's called.
Figure out which partition is your root partition - (hint it'll be in ext3 or ext4 format)
Make a note of what label it's given by linux Probably sda1 or sda2 or something - you'll need this in step 4.
Right click it and chose "check"
Let it finish - hopefully nothing will be wrong or it will fix what is wrong. (if it's worse that that you'll have to google a solution for fixing it)

Step 2 - Reboot, choose the 2nd option down the list when grub appears this should be the newest kernel, but in "recovery mode"

Step 3 - When you get to the annoying error about waiting for drives to mount, it should say "press ESC for prompt" or something like that, press it. If it doesn't give you a prompt then i don't know what to do so you'll have to keep looking for solutions.

Step 4 - Remount your root partition as read/write
For some reason when the upgrade procedure gets broken half way through GRUB is left in a state where it is instructed to mount all drives as read only.
You need to remount your root partition as read/write so that you can resurrect the upgrade process
remember the label for your partition that you noted down in step 2? It goes here:

Code:
mount /dev/sda1 -o rw,remount
just replace sda1 with whatever your root partition is called.

Step 5 - check your networking

type
Code:
ping www.google.com
if it gets a reply rather than just timing out you have an internet connection!
At this point my networking wasn't working - i had an ethernet cable connecting the pc to my router so i knew i had a link. Getting wifi up manually is outside of my scope im afraid, but to get wired networking up i scoured the forums and came up with this:
type:
Code:
mkdir /var/run/network
don't ask me why..
and then get a text editor up:
Code:
nano /etc/network/interfaces
then add the lines:
Code:
iface eth0 inet dhcp
auto eth0
press ctrl-O to save then ctrl-X to exit
then at the prompt type:
Code:
ifup eth0
it should churn out some ip addresses and something about DHCPDISCOVER then NTP then it'll hang - press ctrl-C to get a prompt back
then type
Code:
ping www.google.com
if it gets a reply rather than just timing out you have an internet connection!
if you don't have a internet connection then you'll have to get googling as it's outside my scope

Step 6 - resume the upgrade
type
Code:
dpkg --configure -a
you might have to answer some question when prompted. I generally just agree with what it suggests.
then type
Code:
apt-get update
then type
Code:
apt-get upgrade
again there will be questions to answer, as what is happening in front of your very eyes is the upgrade procedure finishing what it started.
once this finishes type
Code:
apt-get update
then type
Code:
apt-get upgrade
just to make sure no stragglers are left - keep repeating these two commands until nothing new happens.

then type
shutdown now -h
your computer will switch off. Turn it on. Mine booted perfectly into Karmic. Hooray!