I've just been trying this on Ubuntu and had the same problem.
Increasing the video ram in the virtual machine from 4 to 16 MB fixed
it, and now it works. (At least, I'm pretty sure that was the change
that fixed it.)

On Fri, 2009-10-23 at 14:01 -0700, mhampton wrote:
> I haven't tried it on Windows yet, but I tried on my intel 10.4 mac
> and got an error:
> 
> Unknown error creating VM (VERR_INTERNAL_ERROR)
> Result Code: NS_ERROR_FAILURE (0x80004005)
> Component: Console Interface: IConsole {0a51994b-cbc6-4686-94eb-
> d4e4023280e2}
> 
> -Marshall
> 
> On Oct 23, 2:32 pm, William Stein <wst...@gmail.com> wrote:
> > Hi,
> >
> > Please try out
> >
> >    http://sage.math.washington.edu/home/wstein/binaries/sage_vbox-4.1.2-...
> >
> > Let me know what happens.  It addresses several issues.  Now you
> > should be able to install new packages, build Cython/GCC/G++ code,
> > change/develop Sage, etc.
> >
> > And, amazingly, it is only 2MB bigger than the old sage vbox.
> >
> > Extra thanks to Bill Page for helping with this.
> >
> >  -- William
> >
> > --
> > William Stein
> > Associate Professor of Mathematics
> > University of Washingtonhttp://wstein.org
> 

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