"Kernel panic - not syncing: VFS: Unable to mount root fs on unknown-block(xxx,xx)".
I tried all different manner of parameters with "linux xxxxx" as recommended by the installer.
None of these worked.
It looked like the Hyper-V drivers weren't working at first.
So I re-downloaded the OEL 5.7 ISO, and re-attached to the VM cd-rom.
Then it worked!
Must have been a corrupt OEL 5.7 ISO that prevented it booting into install/setup from Hyper-V.