you don't need to remove the old kernel entry. All you need to do is change the "default" value. Leaving the old will provide a failback in grub menu in case something goes wrong with the current one.
New kernel is in stable now (along with a bunch of other updates). The update to upstart will break autologin the first reboot. But after that, you won't have to worry about it anymore.
I rebooted a few times to make sure everything was all good before deleting the old kernel. Don't want a grub bootloader with a thousand entries. Tested the recovery of the new kernel too...all was good. Out with the old...in with the new. Only issue is my usplash drops back down to a shell again after few seconds into the boot up. How do I get the kernel to stop looking for "splashy" in sbin to prevent this from happening??
try that ^^.
Also, if you install usplash-theme-ubuntu, does the splash last until X starts or does it drop to text early as well?
Updated OP with video.