I was having problems installing any kernel past 2.6.5-322 and installing FC2 on my ASUS M3N laptop, and would get a "Kernel Panic - Attempted to kill init!" error. Found out that there is some big with Intel Speedstep that prevents it from installing. If you go into the BIOS, disable speedstep, and restart, you should be able to install with no problems. I don't know if this will work on any other ASUS laptops, but considering most of their models use the AMI BIOS you might want to try this for them as well.
It is also possible that this is a larger issue with Speedstep as well.

I am using an ASUS M3N laptop, 1.7GHz Pentium M (Banias), 512MB of Kingston memory, an 80BG Hitachi Travelstar HDD, and an Intel 2200BG PRO/Wireless Card. Graphics and chipset are all Intel 855GM. If anyone needs any further information, please do not hesitate to ask.

I had the same problem... it's your ACPI probably, at least mine was. When you install, try the acpi=off argument... it worked for me. I've got kernel 2.6.435.2.3-1. I think. at any rate, you'll need to boot with acpi=off until it's updated, and then boot with acpi to test. it should work without a hitch, mine did.