update-grub put root=/dev/sda6 on kernel line

Actually the kernel line may be specified either way, either by UUID or /dev/sdax. I suspect that it looks this way in your menu.lst because it appears to me that you have a separate /boot partition. The real reason it looks this way is because of the kopt entry in your Automagic Kernel List which most likely is
# kopt=root=/dev/sda6 ro

You can use this command get more detailed information about your partitions

sudo blkid
df -h

I suspect the results will tell you that
UUID 37797f98-87e5-4233-8814-c6ad5fa0b9e4 is /boot rather than your root partition /
/dev/sda6 is your root partition /

It is easy to get these thing confused because there are two reference to root in a grub entry. The initial root line specifies the partition where /boot is located and you linux kernels. The root in the kernel line refers to your root partition / which contains /sbin/init.

If you really want to change your kernel line, make sure you use the UUID from /dev/sda6 and don´t forget to edit the kopt line as well or it will revert after the next kernel update.

Hope this helps

This menu.lst was created anew during a new install of intrepid. What I am asking is whether update-grub should be using the UUID form for root= whenever it can, especially for a fresh install when there is no previous menu.lst.

If so, then there is a bug in update-grub.

If not, then why switch to UUID's to specify the groot and revert to the /dev/ form for the kernel line?

according to changelog grub 0.97-29ubuntu44 fixes the problem