It's strange that the update manager skipped from Hardy (8.04) to Jaunty (9.04) when doing a distribution upgrade. I was under the impression that the update manager would not skip versions so you should have been upgraded to Intrepid (8.10) first. Unless you just did the distribution upgrade twice in a row.
In any case, Jaunty is still in BETA so you should probably check https://launchpad.net/ubuntu
to see if a bug has been filed.
If you don't want to have to choose a kernel every time you log in, you can edit /boot/grub/menu.lst to boot the working kernel by default. Please be careful when you edit this file; there are many places on the web with instructions on how to do this.
If I were you, I wouldn't have been messing with Jaunty until a month or two after it was officially released. Unless, of course, you're comfortable troubleshooting, filing bug reports, and potentially having your system in a broken state.
Since it sounds like you can boot with one of the older kernels, just go ahead and use the older kernel.