Comment 1 for bug 27907

You need to have linux-restricted-modules-2.6.12-10-386-nvidia-legacy installed as well (which I suspect you do), and then, due to the fragility of how this all works in breezy, you'll need to reboot before you can actually use it.

Thankfully, this is all much more robust (no more extra package for the kernel module, and things Just Work) in dapper.