2 more (Squeeze) systems to upgrade from 3.5.12 here today. Using 
official repo (not "nightly builds")

I made sure to upgrade all Debian packages first (TDE sources 
temporarily disabled) and reboot. There was a recent Squeeze "point 
release". One machine has nvidia.

Then (TDE sources re-enabled) used apt-get in download-only mode :
apt-get update && apt-get dist-upgrade -d

Once more:
apt-get update && apt-get dist-upgrade -d

That should have shown error messages for any failed downloads (there 
were not). If so I could have either waited or downloaded manually from 
"nightly builds" to /var/cache/apt/archives

Then, to see if any other errors, like half the system to be removed or 
packages which apt will not install:

apt-get dist-upgrade -s

Finally, when satisfied it all looks good:
(su)
/etc/init.d/kdm-trinity stop
(log in to shell as root)
apt-get update && apt-get dist-upgrade
(when prompted for config file overwrites, select "install the package 
maintainer's version")
/etc/init.d/kdm-trinity start

No problems at all.