I've updated my Dell severs (PowerEdge 1425) from the 2.4 kernal to the 2.6.8-3-686-smp (note the smp part for dual CPU)
Till now I've never had a problem (my servers are about 100 km from here)
The way I did it. (it's like Hans his way)
1) Find the kernel you want to install
apt-cache search kernel-image | grep 686
(in my case 686)
apt-cache search kernel-image | grep 2.6
2) When you have found the correct kernel-image for your system you need to "install" it (lets say it's "kernel-image-2.6.8-3-686-smp"
apt-get install kernel-image-2.6.8-3-686-smp
Done. Now you can do a reboot.
To see if you are using the new kernel, do a
If you want you can (after the reboot) remove the "old" kernel
Again. I've never had a problem doing it this way on my Dell servers!