I found, that this bug was already posted:

https://bugs.launchpad.net/ubuntu/+source/virtualbox-ose/+bug/126863

My experience:
I could install edubuntu server, also it hangs about 10 min. but then it 
resumes.
And it works in VirtualBox.

But ubuntu server 7.10 does not work:
PANIC: CPU too old for this kernel

There are some workarounds:
http://snippets.aktagon.com/snippets/101-Solution-for-Kernel-panic-CPU-too-old-for-this-kernel-when-installing-Ubuntu-on-Parallels


** Attachment added: "Screenshot during ubuntu server boot"
   http://launchpadlibrarian.net/11732764/ubuntu%20server%207.10.gif

-- 
Ubuntu Server enable PAE without checking for support
https://bugs.launchpad.net/bugs/187179
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