The main cause of a Kernel Panic, which are extremely rare by the way, are hardware problems, such as:
1. Faulty RAM - try removing and re-seating the RAM if possible.
2. Faulty Airport Card (or not fitted correctly) - try removing or re-seating it.
3. Logic board problem - costly, so let's hope it's not that!
4. USB devices (scanners, printers, ext HD, hubs etc)
5. Firewire devices
To rule out the first three items, insert your "Hardware Tests" disc, which should have come with your Mac when new. Boot from this disc (Restart with the "C" key held down) and run the "Extended Tests" which will check all major hardware components for failure. Report back with any errors that it comes up with.
In the case of 4 and 5 above, remove all USB/Firewire devices and see if the Mac boots properly. If it does, connect just one item at a time and see if the problem returns. If it does, check the drivers are up-to-date for this device.
Another thing to check, boot from your "System Install" disc (sometimes separate from the hardware tests disc on earlier models). At the OS X installer, click through the first screen, then go under the top menu and select "Disk Utility". Select your main hard drive in the list and click the "Repair Disk" button to check and repair any directory problems on the drive. If any are found, repeat the process until you get "The disk... appears to be OK" - then quit Disk Utility and quit the OS X installer, it'll ask you to restart the Mac. Hopefully, it'll work now.
