Hi, have updated wiki for installing new kernel images, this way you can install newer kernels than 2.6.27 that is in Intrepid (8.10) repos.
In this example I installed 220.127.116.11 kernel image via Ubuntu PPA repository:http://wiki.linuxmce.org/index.php/Upgrading_the_Kernel#Installing_newer_2.6.3x_kernels_via_PPA_repository
This kernel update procedure hasn't been thoroughly tested, so please do this at your own risk. Risk should be minimal because you will still have your old kernel and boot it if this one doesn't work as expected.
Please suggest any better way to update kernel and share you experience after following these instructions.
Why should you update your kernel? Only if you have some piece of hardware that is know to have issues with 2.6.27 and older kernels.
For me the main issue is that 2.6.27 has really poor webcam support. Webcam support is much better with newer kernels.