MaclessInAZ wrote: My Mac guru since 2002, insists that Kernel Panic is always hardware related.
Your Mac guru is a little incorrect: it's often hardware related, but not always. You should send him to Apple's Tech Note TN2063, which is an article on kernel panics. There's some example code at the bottom of that article that will, once compiled and installed, cause a kernel panic on an otherwise healthy Mac.
If you have any software that installs kernel extensions, that could cause kernel panics. A while back, an anti-virus program was coming up with a false positive in the OS X virtual memory files and deleting them, causing kernel panics. That's purely software related. If you install VMWare or Parallels, they install kernel extensions. If they have a bug in their code, you could get panics.
So, it's probably best to suspect hardware to start with, since it's very often the cause of a panic, and it's easy to check with the hardware test disc. But it won't always be hardware...