Configuring grub v2
The configuration file is /boot/grub/grub.cfg, but you shouldn't edit it directly. This file is generated by grub v2's update-grub(8), based on:
The script snippets in /etc/grub.d/
The configuration file /etc/default/grub
To configure grub "v2", you should edit /etc/default/grub, then run update-grub. Advanced configuration are achieved by modifying the snippets in /etc/grub.d/.
Also check the Grub2 page for more detailed configuration instructions, ideas and suggestions.
Upgrading from v1 to v2
To upgrade to grub v2, you should:
Install grub v2 (but don't remove the grub 1 yet).
Follow the instruction displayed the package installation (i.e grub v1 now has an entry to cascade to grub v2, so reboot and try it, then you can actually enable grub2 bootloader by running upgrade-from-grub-legacy).
Transition from v1 to v2
Grub Transition page.
Installing GRUB on disk
If you are ok with your GRUB configuration, you can install GRUB on the MBR of your disk using grub-install.