I experienced both error messages (BUG: Unable to handle kernel and Kernel 
panic - not syncing) with VT-x enabled on Virtual Box until I realized that the 
option that has to be set is on the virtual machine itself!
To be clear, the option that has to be enabled is not the one on 
File->Preference>General. You have to get the settings of the particular 
virtual machine, and in the General->Advance click twice on the VT-x/AMD-V 
option (so that it is not grayed).

It may also help adding some video memory. 
I am now running the installer on the VM. I hope this helps others too!

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Kernel panic during boot in VirtualBox with kernel 2.6.26.3-generic
https://bugs.launchpad.net/bugs/246067
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