I wanted to post this for future searchers, since I spent a long time dealing with the issue, and there have been numerous posts on it, both here and on the official forum. (I wanted to suggest that Intuit add something to their users' guide, but for some reason-e-mail error-they won't let me register to post on the official site.)
I have tried all the methods suggested for updating my Vanguard accounts from Investor shares to Admiral shares, including shares in/out and corporate acquisition. What worked best for me (2006 DLX) was stock split. It was both simple and flawless-my shares, history and cost basis all exactly match my info from Vanguard on my 3 accounts. Just remember to change ticker symbols when you're done.