Trouble starting or restarting OSX

This is the error I am getting. Any help appreciated...

panic(cpu 0 caller 0x47f5ad): "Process 1 exec of /sbin/launchd failed, errno 2\n"@/SourceCache/xnu/xnu-1504.15.3/bsd/kern/kern_exec.c:3145
Debugger called: <panic>
Backtrace (CPU 0), Frame : Return Address (4 potential args on stack)
0x35a7be48 : 0x21b837 (ox5dd7fc 0x35a7be7c 0x223ce10x0)
0x35a7be98 : 0x47f5ad (0x5cf950 0x831c080x2 0x0)
0x35a7bef8 : 0x4696d2 (0x4fb3d20 0x1fe 0x4def9a0 0x80000001)
0x35a7bf38 : 0x48fee5 (0x4de4b7c 0x2fd75000 0x35a7bf88 0x226e2f)
0x35a7bf68 : 0x219432 (0x4de4b7c 0xffffff7f 0x35a7bf88 0x2a45c9)
0x35a7bfa8 : 0x2aacb4 (0xffffffff 0x1 0x22f8f5 0x227c4b)
0x35a7bfc8 : 0x2a1976 (0x0 0x0 0x2a17ab 0x4c387ec)

BSD process name corresponding to current thread: init

Mac OS version:
Not yet set

Kernel version:
Darwin Kernel Version 10.8.0: Tue Jun 7 16:33:36 PDT 2011; root:xnu-1504.15.3~1/RELEASE_I386
System model name: MacBookPro1,1 (Mac-F425BEC8)

System uptime in nanoseconds: 1293787714



Thanks, Aaron

Please read through this article from the X Labs. LINK

Same happens here on MacPro 3,1

Dear Aaron,

have you found a solution for your problem?
I get the *same* error on my MacPro 3,1 while installing Mountain Lion. Snow Leopard is running fine and stable (no kernel panics at all). Have you contacted Apple so far?

Thanks&Cheers

Ralf