I have a working 2.6.18-5-amd64 kernel. I compiled a 2.6.23 kernel, because it can handle my Rocket-Raid Controller. However, with the 2.6.23 I get
"/sbin/init: 432: cannot open dev/console: no such file
Kernel Panic: attempted to kill init"
And, when I modified 2.6.18, and created 2.6.18-6-amd64; to add some alsa debugging; because I have no sound; I got the same Kernel Panic.

less /boot/grub/menu.list
title Debian GNU/Linux, kernel 2.6.23-1-amd64
root (hd0,0)
kernel /boot/vmlinuz-2.6.23-1-amd64 root=/dev/sda1 ro
initrd /boot/initrd.img-2.6.23-1-amd64
savedefault

title Debian GNU/Linux, kernel 2.6.23-1-amd64 (single-user mode)
root (hd0,0)
kernel /boot/vmlinuz-2.6.23-1-amd64 root=/dev/sda1 ro single
initrd /boot/initrd.img-2.6.23-1-amd64
savedefault

title Debian GNU/Linux, kernel 2.6.18-6-amd64
root (hd0,0)
kernel /boot/vmlinuz-2.6.18-6-amd64 root=/dev/sda1 ro
initrd /boot/initrd.img-2.6.18-6-amd64
savedefault

title Debian GNU/Linux, kernel 2.6.18-6-amd64 (single-user mode)
root (hd0,0)
kernel /boot/vmlinuz-2.6.18-6-amd64 root=/dev/sda1 ro single
initrd /boot/initrd.img-2.6.18-6-amd64
savedefault

title Debian GNU/Linux, kernel 2.6.18-5-amd64
root (hd0,0)
kernel /boot/vmlinuz-2.6.18-5-amd64 root=/dev/sda1 ro
initrd /boot/initrd.img-2.6.18-5-amd64
savedefault

title Debian GNU/Linux, kernel 2.6.18-5-amd64 (single-user mode)
root (hd0,0)
kernel /boot/vmlinuz-2.6.18-5-amd64 root=/dev/sda1 ro single
initrd /boot/initrd.img-2.6.18-5-amd64
savedefault

Post the results of the commandCause it looks like you didn't created (or misplaced it) a RAM disk.

PS: modify your message to distinguish between your text and the outcome of a command, using the code tags as I did above.

total 27160
drwxr-xr-x 3 root root 1024 2007-11-18 18:31 .
drwxr-xr-x 23 root root 1024 2007-10-10 14:46 ..
-rw-r--r-- 1 root root 64792 2007-10-02 16:32 config-2.6.18-5-amd64
-rw-r--r-- 1 root root 64955 2007-11-18 18:23 config-2.6.18-6-amd64
-rw-r--r-- 1 root root 68774 2007-12-01 11:34 config-2.6.23-1
drwxr-xr-x 2 root root 1024 2007-12-01 11:36 grub
-rw-r--r-- 1 root root 5441447 2007-11-10 10:23 initrd.img-2.6.18-5-amd64
-rw-r--r-- 1 root root 5012413 2007-10-10 13:12 initrd.img-2.6.18-5-amd64.bak
-rw-r--r-- 1 root root 5156864 2007-11-18 18:33 initrd.img-2.6.18-6-amd64
-rw-r--r-- 1 root root 4202496 2007-11-11 07:29 initrd.img-2.6.23-1-amd64
-rw-r--r-- 1 root root 973806 2007-10-02 18:27 System.map-2.6.18-5-amd64
-rw-r--r-- 1 root root 971987 2007-11-18 18:24 System.map-2.6.18-6-amd64
-rw-r--r-- 1 root root 1093121 2007-12-01 11:36 System.map-2.6.23-1
lrwxrwxrwx 1 root root 22 2007-10-28 09:17 vmlinux -> vmlinuz-2.6.18-5-amd64
-rw-r--r-- 1 root root 1512396 2007-10-02 18:27 vmlinuz-2.6.18-5-amd64
-rw-r--r-- 1 root root 1513827 2007-11-18 18:24 vmlinuz-2.6.18-6-amd64
-rw-r--r-- 1 root root 1602040 2007-12-01 11:35 vmlinuz-2.6.23-1-amd64

Did you build in SATA support into the kernel? You'd have to compile it into the kernel, otherwise it can't access the root drive on an SATA disk...