After upgrading from FC5 to F7 (with DVD), the system failed to boot and gave this message: Unable to load SELinux Policy. Machine is in enforcing mode. Halting now. Kernel panic - not syncing: Attempted to kill init! Kernel is 2.6.21-1.3194.fc7. I worked around this problem by rebooting with the DVD's rescue mode, then I chrooted to /mnt/sysimage, edited /etc/grub.conf and added "selinux=0" to the kernel parameters.
This is a labeling problem. If you change the machine to permissive mode you should be able to fix the labeling. Kernel parameters "enforcing=0 autorelabel" Should cause the machine to boot in permissive mode and trigger a relabel. You can also do this at the grub prompt, and do not have to boot the rescue mode.