After further testing with kernel 2.6.32.4-1, I have found two bugs:
(1) the kernel upgrade kills WindowMaker (2) the kernel upgrade kills VirtualBox
even with 2.6.32.3, I had to recomile virtualbox module. I tried to start a VM and system froze solid and had to do hard reset. With a recompile, its working though.
Are you talking about recompile of the vbox module, that I just did, or are you talking about a kernel recompile?
vbox module recompile.
It fixed the issue on 2.6.32-3 but from your post it seems, it is not sufficient for 2.6.32-4.
It is working here with x86_64. I have updated _only_ the kernel, headers and firmware, after that I've rebuilt the vbox module and reboot. Everything is working as it should. It is clearly stated when you install virtualbox that you need to rebuild the vbox module after every kernel update, if before it was only needed after a kernel version change it was just luck. And I guess just rebuilding the module doesn't cut it, if it is already inserted you may have to rmmod it and modprobe it again, but to be safe I think it is better to reboot the machine.