Hi,
When we went through the process for this security update and rebooted, the server would not boot - kernel panic messages related to can't mount /dev/...'. This happened on both servers on which we did the kernel update/upgrade.
(Note these servers are not standard installs, as they use PVE over software RAID, so this problem may be unique to software RAID or other non-standard installs straight on Debian Lenny.)
The way to avoid the problem is after apt-get update and apt-get upgrade, but *before* rebooting, execute the following command:
update-initramfs -k 2.6.24-7-pve -v -u -t
Rebooting afterward should work.
It might be a bit confusing that there are some other kernel numbers that refer to 2.6.24-10, but for this particular upgrade at this time the 2.6.24-7-pve is still the right number.
If by accident the server is rebooted before executing the additional command, you will need to boot with the standard kernel instead of the Proxmox kernel, execute the above command, then reboot again with the Proxmox kernel. Everything should operate normally again after that.
While we did not try it specifically, I believe that executing the update-initramfs command won't hurt if it is not required. Therefore if you are managing a remote server, you may want to execute the command routinely after a kernel update anyway, in order to avoid a trip to the physical server if you don't have boot KVM access.
Hope our experience saves someone else using the excellent Proxmox VE some time!