Windows server 2008 64-bit. Sorry, forgot that info.
Also, I made an error while evaluating the problem. The CD rom boots, but it doesn't run, with the same error. A 32 bit win 2008 server CD boots fine (we have both versions, depending on the memory requirements, we may use one or the other atop kvm), the 64bit one and the normal boot present the following error:
Windows failed to start. A recent hardware or softw
cause. To fix the problem:
1. Insert your windows instalation disk and rest
2. Choose your languahe settings, and then click
3. Click repair your computer
I can only read this because the java vnc viewer does not resize the screen anymore (I haven't use the nc trick to redirect vnc, probably works that way). The resize doesn't work with the CD install screen (32bit) either... so I guess that's another prob with this upgrade