Is there a good distro for general usage and software development (both linux and other environments, like Qt) and experimenting with different SW, and can be booted using Vista boot loader as the primary boot loader, and has the common kernel.

Due to the packages, preferably Debian-based.

I understand Debian still has patched kernel and thus a separate kernel repository. Is this still so?
I used to have Debian, but encountered problems with kernel updates. Also there were devices not supported by Debian back then, and update always removed the manually installed drivers.

I tried Ubuntu, but the first update broke the boot. I had to install it using the alternate installer (text based), begcause otherwise it didn't allow putting Grub(2) onto the root partition instead of MBR.
The update doesn't seem to be able to handle that.

The reason for using Vista boot loader as primary is that I haven't encountered a machine yet that was sold with the windows installation CD/DVD - My only possibility of Vista problem recovery is booting from the Vista rescue partition, and if Vista boot loader is removed... Also other Vista rescue tools expect to deal with Vista boot loader.

Put grub on a usb or cd and use to boot your linux.

On the boot issue, Window Vista was one of Microsoft's biggest blunders since Window ME. The easy universal way to set up a multi-boot system with any version of Windows and (almost) any distribution of Linux is to keep them on separate drives. The key word there is "seperate", so that they can't interfere with each other. If you can't install another hard drive inside your computer, you can buy a USB external drive and most Linux distributions will be happy with that. Just make sure your computer can boot from USB.

In any case, before installation, unplug the data cable from your Windows drive so that the Linux installer can't see it. When installation is complete, plug the data cable back in, and you are ready to reboot. In the case of using an internal hard drive for Linus, you will have to mess with your BIOS settings and specify which hard drive you want to boot from. If you used a USB hard drive Linux, then you just have to set the BIOS to boot from External or USB devices first. You need to check the exact wording within the BIOS setup menus. When in doubt, search Google and look for the manual.

After you get everything set up and verify that you can safely boot into both Windows and Linux, then you can change the boot menu for GRUB and add an entry for Windows. I suggest checking the man pages ("man grub" without the quotes in a Linux terminal) and the Wikipedia article(https://en.wikipedia.org/wiki/GNU_GRUB) for more information. Specifically, search for something called "chain loading", which allows GRUB to pass control to a different boot loader (the Windows Vista loader).

Now for the "which distro" portion. Based on the wording of your post, I'm going to assume that you are just starting out with Linux. Indeed, Debian is a rock solid distro, so long as you stick to the stable branch, but most of the software is a few major revisions behind other distributions. You'll also be waiting a while for another "stable" relase (1 to 4 years). For a more modern alternative, you could try Arch Linux. The installer is text based, you have to manually set up Xwindows, which is the "base" that GNOME, KDE, etc, sit on top of, and you have to spend a lot of time reading documentation.

Arch is more geared torwards advanced users, but system configuration is done through only a few files (rc.conf being the big one), the package manager is easy to use (though command-line only), and the software is always up to date (no fixed release cycles). If you still want something Debian based, you could try the latest version of Linux Mint. Ubuntu is another option, but the latest 11.10 release actually seems to be unstable.

Closing with the kernel thing, I have absolutely no idea what you are talking about. I always stick to whatever kernel the Linux installer puts on my system.

Note: Ensure you install grub to the USB hard disk, not your main fixed hard disk...

I can't understand how this has become so difficult all of a sudden.

The dual boot itself (setting it up) is not the problem but linux updates are.
Debian had trouble of locating the Debian-specific kernel repository and
Ubuntu updated the Grub2 and wanted to "fix" the boot loader on MBR.

Does Mint handle the Grub2 on root partition right?
It doesn't have automatic updates, and the recommended way of updating is
fresh install that overwrites the old. That implies storing of all stuff somewhere else
and (I guess) re-installing all SW.

I have two machines with Windows/Mint dual boot, but in those, the Grub2 is used
as the primary boot loader - one of them is Win2000 with installation CD (no worries).
The other machine is not my responsibility (Windows 7).

The machine I'm worried about now had Windows Vista / Debian dual boot (Grub) and
I changed it to Vista/Ubuntu dual boot (Grub2): No problems until Ubuntu update.

BTW, I think that in case of Ubuntu, it would have been enough if it
supported installation of Grub2 on the root partition. It could have
updated that, and all that would have been needed would have been
re-entering the Grub2 to Vista boot loader with EasyBCD or similar
(if even that). Windows 7 has the boot editor, so no 3rd party SW is needed.

Stupid me!
The update was fine. It was just that the alternate install installed Grub.
What was needed, was adding a new Grub2 entry in the Vista boot with updated version of EasyBCD.

Now the problem is to find my way around the new Ubuntu.
For another machine I tried Lubuntu and there I could find everything, but Ubuntu seems to be
hiding everything non-office stuff. Even terminal was hard to find.