Kernel panic on original kernel after rebuilding/installing new kernel

A VFS panic usually happens when the kernel doesn't have the drivers necessary to mount the 'root' partition. During the boot process, the bootloader reads the (usually compressed) kernel into memory, decompresses it, then runs it - all the reading uses the BIOS. The first thing the kernel does is set up to initialize itself; part of the initialization is to switch the processor to "virtual memory mode" - at this point the BIOS is no longer accessible and you need a kernel driver for everything. A common problem is that people do not use 'initrd' but forget to compile some driver like SATA, ext2, ext2, SCSI, etc, - in this case you just get a panic.

If you use 'initrd', a special compressed file is created which contains drivers and other things to help set up the system. The bootloader (or was it the kernel) reads and uncompresses 'initrd' which contains its own 'root partition' but in reality it is all stored in RAM and not on disk. The kernel can start, 'root' is already mounted, and software can run to identify your hardware and load drivers. When the correct drivers are loaded, the scripts then mount your real root partition and, if instructed, remove the initrd root system from memory.

If you don't use initrd, you need to build all drivers necessary to read the root partition into the kernel for a successful boot.