If you have a new PowerBook 12" model, and it's having kernel panics after updating to Mac OS X 10.2.5, here's one potential solution: Take your powerbook to the nearest Apple Service Center to have your firmware updated.
I have had two instances already; one I tried to resolve by doing a full hardware diagnostic, and also did a fresh system restore, but I still had kernel panics. In the end, we discovered the firmware had to be updated which solved the problem.
The process of updating the firmware is a quick and painless, should not take more than 30 minutes.
[robg adds: This is the first I've heard of a firmware update for the 12" PowerBooks, and I have no way to easily verify whether it's true or not. Still, it might be beneficial to ask the question if you've got a machine that continues to panic despite all the usual troubleshooting techniques.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20030425140724448