This is the most elegant and satisfying fix I experience to avoid a potentially serious problem ...
During the upgrade process from Ubuntu Jaunty 9.04 to Karmic 9.10, The update-manager usually wants to interact with the user to configure packages. At some point during this process, my USB subsystem stopped working, and I could not interact with the dialogs via keyboard or mouse (tried, but PS/2 keyboard did not help. They are generally not hot pluggable). Perhaps one could reboot and resume the process, but this could also leave the system in a bad state. I could get ssh access no problem. Could I get control of the dialogs remotely?
The answer is NX, and the answer is a resounding YES!
I already had a NX server running on the box, so I merely had to follow this HOWTO to enable "desktop shadowing". After editing /usr/NX/etc/server.cfg, enabling Shadowing and restarting the NX server
$ /etc/init.d/nxserver restart
I was able to use the NX client to regain control of the update process. Viola!
For those of you who do not have NX installed already, here is a nice guide. One might have trouble installing the NX server with dpkg, as there would be a dpkg already running due to the upgrade process. In this case, one could install from source.
Another option would be to try and revive the USB subsystem, but this worked so quickly, I didn't need to go down that road.