Hi,
I just run into the same problem while rebooting a fresh install of 8.04 LTS 
i386 on VMWare Server 1.0.4. This is not only a
"me too", but as there seems to be a lot of activity in
  https://answers.launchpad.net/ubuntu/+question/23343 and
  https://answers.launchpad.net/ubuntu/+question/31405
but no response or action here, I'm asking to re-evaluate this report.

I think, that debian-installer should be fixed, either by installing 1 fitting 
kernel or 2 kernels (optimised and safe).
Additionaly there is no hint during the installation, that a special kind of 
hardware is required!

I added the affection of debian-installer as already said in a comment
before.


** Also affects: debian-installer (Ubuntu)
   Importance: Undecided
       Status: New

-- 
PANIC: CPU too old for this kernel
https://bugs.launchpad.net/bugs/151942
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