Nothing broke between them. A core kernel such as the one you’re describing (default install) contains drivers for video cards. With this comes the idea of kernel mode setting (KMS) which makes the terminal screen fit to the native resolution (if I understand it correctly) to your display.
The issue was KMS was not a fully tested feature and hence would show a snowy screen on some systems. Other systems it would display perfectly fine.
I imagine that an updated kernel (which one did you use 3.8.8 or something somebody built?) just has more support for video and can properly negotiate the KMS needed for the display.
If you’re using a custom one, I imagine you’re using a kernel that doesn’t care about the video card and just displays no matter what, which would also explain why you’re not seeing the “snowy” screen anymore.
