I just installed the 126.96.36.199-bfs kernel as per the new 2010 iso.
It worked fine except when I installed VirtualBox OSE from the repository I got the error, "Kernel driver not installed ... Please reinstall the kernel module by executing .. /etc/init.d/vboxdrv setup". This doesn't work as the file vboxdrv doesn't exist.
I went back to the original kernel (188.8.131.52) and VirtualBox OSE installed and ran just fine.
Realising the I needed usb support I removed VB OSE and installed the PCLinux 2007 version from the Sun site. That worked fine so I thought, "perhaps I should try it with the bfs kernel". Guess what, it works!
So, the VB in the repository doesn't work with the kernel now in the iso but the version on the Sun site (VirtualBox-3.1-3.1.6_59338_pclinuxos2007-1.i586.rpm) works.