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Hi Dietmar, I can confirm the the issue is resolved for me after applying the latest kernel. Thanks for your help.

Yes, restarted a few times. Definitely something in this kernel version as I have changed the default in /boot/grub/menu.lst to 1 (kernel 2.6.24-5-pve) rebooted and all containers are starting OK now. Trying to find any clues in log files but cannot see any errors, warnings etc

Have some problems after apt-get upgrade with latest kernel security. Install seemed to work OK but some containers (Unubntu 8.04L) now are not able to start and remain in mounted state. Basically the container dies after about 1 second of starting...(see below) 2009-08-19T20:49:48+1000 vzctl...