system hangs while using desktop

while using the system through the desktop, the entire system hangs (can't move mouse, can't get to ttys). Only way to shutdown the system is through power switch. kernel 2.6.32-31 has no problem.

ProblemType: Bug
DistroRelease: Ubuntu 10.10
Package: linux-image-2.6.35-28-generic 2.6.35-28.50
Regression: Yes
Reproducible: No
ProcVersionSignature: Ubuntu 2.6.35-28.50-generic 2.6.35.11
Uname: Linux 2.6.35-28-generic i686
NonfreeKernelModules: nvidia
AlsaVersion: Advanced Linux Sound Architecture Driver Version 1.0.23.
Architecture: i386
AudioDevicesInUse:
 USER PID ACCESS COMMAND
 /dev/snd/controlC0: marjomercado 2461 F.... pulseaudio
CRDA: Error: [Errno 2] No such file or directory
Card0.Amixer.info:
 Card hw:0 'ICH'/'Intel ICH with ALC655 at irq 23'
   Mixer name : 'Realtek ALC655 rev 0'
   Components : 'AC97a:414c4760'
   Controls : 41
   Simple ctrls : 26
CheckboxSubmission: 94d35b46e30e79aba07f9df2418d51bf
CheckboxSystem: 6aacef7cd8944035854fdd34bdd645e7
Date: Sun Apr 3 12:47:35 2011
Frequency: Once a day.
HibernationDevice: RESUME=UUID=f1d8c2ef-f58d-4374-a1cd-9a6e36525107
IwConfig:
 lo no wireless extensions.

 eth0 no wireless extensions.

 vboxnet0 no wireless extensions.
Lsusb:
 Bus 002 Device 002: ID 058f:9360 Alcor Micro Corp. 8-in-1 Media Card Reader
 Bus 002 Device 001: ID 1d6b:0001 Linux Foundation 1.1 root hub
 Bus 001 Device 003: ID 03f0:5312 Hewlett-Packard
 Bus 001 Device 002: ID 1058:1021 Western Digital Technologies, Inc.
 Bus 001 Device 001: ID 1d6b:0002 Linux Foundation 2.0 root hub
MachineType: Gateway T3410
ProcCmdLine: root=UUID=18affd2d-2e5c-4043-96c5-f824b712b517 ro quiet splash
ProcEnviron:
 LANGUAGE=en_US:en
 PATH=(custom, no user)
 LANG=en_US.UTF-8
 SHELL=/bin/bash
RelatedPackageVersions: linux-firmware 1.38.6
RfKill:

SourcePackage: linux
WpaSupplicantLog:

dmi.bios.date: 11/25/2005
dmi.bios.vendor: Phoenix Technologies, LTD
dmi.bios.version: 6.00 PG
dmi.board.name: K8MC51G
dmi.board.vendor: First International Computer, Inc.
dmi.board.version: PCB 1.x
dmi.chassis.asset.tag: Asset Tag Number xxxxxx
dmi.chassis.type: 3
dmi.chassis.vendor: Manufactory Name
dmi.chassis.version: Version xx
dmi.modalias: dmi:bvnPhoenixTechnologies,LTD:bvr6.00PG:bd11/25/2005:svnGateway:pnT3410:pvrSYS-xxxxxx:rvnFirstInternationalComputer,Inc.:rnK8MC51G:rvrPCB1.x:cvnManufactoryName:ct3:cvrVersionxx:
dmi.product.name: T3410
dmi.product.version: SYS-xxxxxx
dmi.sys.vendor: Gateway