I received a setuproot failed error when trying to boot off a custom 3.7 kernel on CentOS 5.9.  Turns out CentOS 5 is getting long in the tooth and needs a hand with kernel settings.

Anyway, this is my error in VMWare.

setuproot: moving /dev failed: No such file or directory

no fstab.sys, mounting internal defaults..

error mounting.etc etc etc.

To fix, configure your kernel with:

CONFIG_SYSFS_DEPRECATED=y
CONFIG_SYSFS_DEPRECATED_V2=y