The reason you have so many entries is because the original kernel from installation is still installed, this is the 2.6.27-7 kernel. One of it's entries is for booting it normally, the other for troubleshooting if something goes wrong.
Because you applied updates, now the newest kernel version for Ubuntu is also installed, this is the 2.6.27-11 kernel.
In the past, many people would advise not to remove the old kernel as the newer one could create problems with your specific hardware and you may need to revert to the old.
I've been running Linux for at least five years now and have many different flavours all the time and never had to revert to an older kernel except when I had problems building a custom wireless adapter driver, recently I was able to build my custom driver against all the latest kernels and have since removed the old kernel. I prefer to not have extra software installed if not needed to keep my compressed backup images of the OS as small as possible, and it is very easy to reinstall an older kernel if required.
Ultimately, if you see no need to keep the old one, open System/Administration/Synaptic_package_manager and scroll down to the "linux-image-2.6.27-7" package and remove it, and "linux-headers-2.6.27-7" package also if it's installed. By removing the old kernel, (linux-image), the entries for it in the boot menu will also be removed.
If you choose to keep it but don't want it appearing in the list, comment it out by adding a hash (#) before the word "title" in both entries for it. To add a hash, issue command: sudo gedit /boot/grub/menu.lst
in a terminal to edit the file as superuser.
It is probably best to keep the two entries for the 2.6.27-11 incase you run into problems and need to boot into recovery mode. But that is not always needed also as you can boot into a live session with the Ubuntu CD to troubleshoot the hard drive installation also. It is your decision to make. I would just comment out the recovery mode entry, it can be uncommented from a live session off the CD if needed later.
The memtest 86 entry can also be commented as it is very rarely used, and again, can be uncommented from a live session if required later. An example list with entries commented follow:
## ## End Default Options ##
title Ubuntu 8.10, kernel 2.6.27-11-generic
kernel /boot/vmlinuz-2.6.27-11-generic root=UUID=944e3d18-78c4-46e2-81a7-8b994d17a989 ro quiet splash
#title Ubuntu 8.10, kernel 2.6.27-11-generic (recovery mode)
kernel /boot/vmlinuz-2.6.27-11-generic root=UUID=944e3d18-78c4-46e2-81a7-8b994d17a989 ro single
#title Ubuntu 8.10, kernel 2.6.27-7-generic
kernel /boot/vmlinuz-2.6.27-7-generic root=UUID=944e3d18-78c4-46e2-81a7-8b994d17a989 ro quiet splash
#title Ubuntu 8.10, kernel 2.6.27-7-generic (recovery mode)
kernel /boot/vmlinuz-2.6.27-7-generic root=UUID=944e3d18-78c4-46e2-81a7-8b994d17a989 ro single
#title Ubuntu 8.10, memtest86+
### END DEBIAN AUTOMAGIC KERNELS LIST
As far as adding Puppy and DSL, you cannot boot an ISO, you'll have to partition.