Rather than having a major stable release like 2.4, and then a long period of development in 2.5, followed by a stable 2.6 kernel later on, it switched to much shorter merge windows and release candidate cycles that last about 2-3 months. So you had 2.6.x kernels which were new stable branches, and would get patches such as 2.6.x.y.
After a while, this got a little silly. When numbers were getting up to things like 2.6.32.60, it gets hard to keep track of the numbers. Since the first two numbers were just sitting there unused, at some point Linus decided it was silly, and they would cycle to 3, and the second number would be for each stable release.
So yeah, 2.2-2.4 was about 2 years between new stable versions. 2.4-2.6 was about 3 years between new stable versions. But then there have been new stable versions about once every 2-3 months, and new long term supported versions picked from those about once a year (for distributions which prefer to do long-term support on a single kernel version, rather than updating to the latest stable).
And now we have only one number sitting there unused! Maybe they'll finish the job next time.
Actually, I think it would make the most sense to go with a year.month numbering scheme, but that probably won't happen.
On Ubuntu, you can always get some newer kernel versions through apt-get, but the default will always be what they consider to be stable (especially for an LTS)
You will also want to update your x.org install: sudo apt-get install xserver-xorg-lts-quantal
Note that some older video cards (nvidia I think) have had their support dropped, so this operation may or may not be safe.
Also, I looked at the X stuff too but it wanted to remove ubuntu-desktop and that seemed pretty drastic so I'm just using the newer 3.5 kernel for now. On this new PC I picked up support for my hot new 1 Gig ethernet, everything else worked fine but now I have an excuse to upgrade to a 1 Gig home router. :) Well once the cable can go fast enough that is. Assuming Google Fiber gets here, they promised Austin but Round Rock might not get it.