I have an old Dell Latitude D600 using USB boot Ubuntu 12.10. When booting, it said that I have the wrong kernal for my CPU. Very odd, Ubuntu 11.10 was working just fine. I tried the 12.10 on another PC (newer Dell), and it works. Not sure what is going on here.
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Please see the first answer here. It explains the problem and offers 3 different solutions!
The error message means that your CPU does not support PAE extensions - that is a technique which allows a 32bit CPU to address more than 4GB of memory address space.
By default, 12.04 and later versions of Ubuntu expects a CPU with this capability.