I just installed the 10.1.1 update over 10.1 because I like living on the edge. Well, I fell off. My computer would not start up. It kernal panicked just after the login screen after 3 consecutive reboots. So I reinstalled 10.1 (5L14) over the 10.1.1 install and everything came back just fine. No problems. Whew!
G4 dual 500, 1.06 GB RAM, ATI Radeon, OS X 10.1, 9.2.1, DVD-RAM, Ultra160 dual channel SCSI.
I had a lot of kernel panic the past 6 month playing around with update after update.
at first i used to do the same as you. reinstalling (not fun)
then i tried various stuff, like disconnecting firewire and usb device and rebooting, and it solve the problem most of the time. ( reconnecting the device after the first successful log on )
but the one that solve it every time for me was to remove the memory ( i have (4) 256mb installing only one and rebooting.. voila! no kernel panic, then after the first good log on, reinstalling the memory.
the only conclusion that i came up too was that by removing the memory the mac had to rescan hardware setting and that solve the temporary kernel panic problem
not that scientific but who cares as it worked on multiple times for me over the past few months