I have an up to date Gentoo system running "Latest 2.6 Stable (2.6.18.8-linode22)" kernel. I've been having some problems with packages installing/upgrading, and in a nutshell, the Gentoo devs suggest the kernel is too old. For the most part, portage will no longer update packages as some of the coreutils packages are severely broken...

Is it "safe" to use the the Latest 2.6 Paravirt kernel? I have manually pinned udev to a version that I know works with the 2.6.18.8-linode22 kernel, so I assume I should update that as well.

Is there anything else I have to do to make the newer kernel work, or can I just select it in the manager and reboot?

I've personally made the switch from Stable->Paravirt with no issues, but ymmv. You should be safe if you've kept your system up to date - all you need to do is select the kernel and reboot.

I've been running gentoo on the paravirt kernels for about 2 years, with no problems.

Install ntp or else your clock will drift with the paravirt kernel.

It's been a while since I had to worry about it, but if you have any packages that depend on kernel sources, I find it is better to download the linode source here, and add a "sys-kernel/vanilla-sources-2.6.35.4" (match the version to the linode kernel) line to /etc/portage/profile/package.provided

Otherwise I can't think of anything else I do special on the linode vs. my other gentoo systems.