I'm thinking about distributed user-based testing (like CPAN Testers), not a big investment centrally which I agree would never work for a FOSS distro. Ubuntu has many millions of users, all with different hardware - what's missing is an easy, automated way to systematically test and gather good quality test result data.
Imagine if you could install a nightly alpha version of Ubuntu as dual-boot, using a separate test filesystem, purely to participate in a wide-scale automated test. Some tests would require human inspection (video / sound problems) but it should be possible to determine whether the system froze or crashed (after a reboot involving the user perhaps).
The ideal is to make it as easy as running SETI@Home - tell the system to reboot into the automated nightly testing setup when you are finished for the day, then it does 99% of the work of testing.
This is more difficult than CPAN Testers, since hardware is involved, but finding installation errors is useful, and even statistical info such as "80% of XYZ Intel GPU model are failing" would be of some use, particularly if logs are automatically uploaded.
On the issue of updating 10.04 without a kernel version change - without KMS, the kernel wouldn't be involved. My problem with KMS is that it ties the flaky support of graphics drivers right into the kernel, and in some cases stops boot (Plymouth etc) or causes freezes. Without KMS, an Xorg+driver update would be enough, which is logistically easier.
I know that KMS is good for the future with GPUs that don't support 2D, but for today's GPUs and particularly Intel, it's a major pain - it should not have been allowed anywhere near an LTS, or perhaps the Ubuntu 10.04 LTS should have been delayed by a year to let the drivers stabilise.
KMS has to happen sometime but it has greatly reduced the actual stability of Linux for some people - in fact Linux is generally much less stable on the desktop than when I first started using it in 1996, perhaps because it has much wider hardware support, or perhaps because it is evolving much faster. On the server, Linux is fine and very stable of course.