I agree, and I think the problem is with initramfs, which is the piece of software which launches the kernel during boot process, and which in your case needs to be updated.

As suggested in that in that Ububtu forum, instead of editing grub.cfg, you should try the following:
X should be the proper partition hosting your OS, how is your partitioning scheme? you might want to post the output of fdisk -l in case you have doubts (If you do, and in general when you post code, use the [CODE] tag.. )
Now:
where 2.6.XXXX is your kernel version, you can check it with
That's it...I hope it really works...

Good luck!

WoW, thank you so much! It is realy works, every single line passed without any single error. But, still did not fixed the problem! Kernel panic: vfs block (0,0)...
Never the less, thank you, good sir, for your time.

Any other ideas?

I am happy that was helpful..even though the problem is not solved...

If you really want to have Debian my last suggestion is to try Crunchbang Linux (aka #!, you can find it here). It is a lightweight Debian-based distro which uses Openbox as window manager (and also has a very good community behind it ).
It is also released in BPO-version (with backports enabled by default) which gives you the chance to try the new kernel version 3.2, maybe that changes something.
If the system boots then you can either choose to stick with #! or just install Gnome or KDE or whatever you like....

Good luck!

1500 gb ram ???

...........

1x1gb, 2x254mb
He is an old pc

You see, this pc I am preparing for my cousin. She got hooked on windows, and i help her with her addiction. I month free trial is enough. So, she only uses firefox, skype, Office and couple of other programs for watching videos online or on pc. So, the idea is to setup the system so that i have a little time to spend at her place, and system that would work as a clock. Debian sounds like her choice, plus because my home system is Debian.) Ubuntu is heavy, 11.10 with their bar on a side...but i know people that like it. Even though, i could remove it and so on, but clean Deabian is light and fast.
Unless you know some other distro for this purpose?

Keep in mind, she knows nothing about pc`s, and life is complicated enough to learn about OS. Let her be..

You could try a lighter weight *buntu like XUbuntu or Lubuntu, the first uses XFCE and the latter LXDE. Either may run faster on the PC than Ubuntu.

This sux5000 that there is no solution for Debian users. Ubuntu works fine, just change grub.cfg root=(UUID to the position of the HD,ex: /dev/sda1) and it works fine. Very strange. This is what tried:
1. sudo mount /dev/sda1 /mnt
sudo mount --bind /dev/ /mnt/dev
sudo mount --bind /proc/ /mnt/proc
sudo chroot /mnt

2. update-initramfs -d -k (ver.of kernel)
update-initramfs -c -k (.............)
update-initramfs -u -k (.............)

3. sudo gedit /dev/boot/grub/grub.cfg (remove UUID, keep root=/dev/sda1 or your location)
(sudo fdisk -l to check dev.config)

4. update-grub

Nothing helped. Same thing, grub loads, and then gives error...

Keeping this thread, maybe someone will share their solution at some point.

I am inclined to agree with the idea of a hardware problem for three reasons:
1) The problem occurs with both Debian and Ubuntu.
2) You mentioned problems with Microsoft on this (old?) machine.
3) I have not seen any mention of this problem on either of the two Debian fora. If there was a problem with the installer, there would be talk about.

I do not know which Debian you are trying, so I shall mention if the system is meant for someone without hacking knowledge and stability is the primary concern, make sure you install Stable, and not Unstable or Testing.