If you are trying to create a new virtual machine on Oracle VM Manager with a Oracle Enterprise Linux 5.7 or a Red Hat Enterprise Linux 5.7 as an O.S.; a kernel panic error may appear:
Kernel panic - not syncing: Attempted to kill init!
You can solve this issue adding an option atribute on the grub loader. Enter the grub menu and press 'a' key to append a new attribute, type the option xen_emul_unplug=never as shown below: