Just installed CentOS 6.2 into a VMWare environment and rebooted and got:

Kernel panic – not syncing: Attempted to kill init!

The cause was I had edited /etc/selinux/config to disable selinux but edited the wrong settting:

This is the mistake I made

# This file controls the state of SELinux on the system.
# SELINUX= can take one of these three values:
#     enforcing - SELinux security policy is enforced.
#     permissive - SELinux prints warnings instead of enforcing.
#     disabled - No SELinux policy is loaded.
SELINUX=enforcing
# SELINUXTYPE= can take one of these two values:
#     targeted - Targeted processes are protected,
#     mls - Multi Level Security protection.
SELINUXTYPE=disabled

This is what it should have looked like

# This file controls the state of SELinux on the system.
# SELINUX= can take one of these three values:
#     enforcing - SELinux security policy is enforced.
#     permissive - SELinux prints warnings instead of enforcing.
#     disabled - No SELinux policy is loaded.
SELINUX=disabled
# SELINUXTYPE= can take one of these two values:
#     targeted - Targeted processes are protected,
#     mls - Multi Level Security protection.
SELINUXTYPE=targeted