Ubuntu 9.10 (Koala) is no longer supported, and so upgrading from 9.10 to 10.04 LTS is also not supported.
Once you have your data and settings backed-up, you should do a fresh install of Ubuntu on your workstation. There may be initial issues with drivers, but this should mostly be resolved by doing an update.
Once you have 10.04 LTS working, then try out (but do not immediately install) Ubuntu 12.04 LTS. This may also work on your PC, but may not be quite as fast.
I have successfully run both 10.04 LTS and 12.04 LTS on an HP Mini netbook (Atom processor, 1GB RAM) or ex-corporate desktops (P4 2.8GHz, 1GB RAM).
Any attempt to upgrade is potentially a high risk to any data (and settings) on the PC. Therefore, the data (and settings) must first be backed-up.
As you have already identified issues with attempting to upgrade, it seemed better advice to suggest that you instead do a new install.
Note: Any inconvenience to yourself and other users also needs to be weighed against the potential loss of data, and likely failure, of the upgrade attempt.