Kernal is used to controls your OS resources, like the Processor and Memory etc.
Some programs are also helped along with the aid of hte Kernal. What happened is when you closed that program that was using Kernal, Kernal was told to go look into an empty space for something that wasn't there that might have been or was meant to be and was confused so it felt the need to tell you.
Maybe there was something on the RAM that gets cleared before Kernal gets there. Dodgy software, as long as it don't happen for all applications I would worry to much.
Its what we have at work, and I run at home. IME win ME is very unstable. If you don't want to fork out for XP get win 2000 professional instead. Very stable, still supported and none of the annoying 'newbie friendly' features of XP.
I run the same as hellcat, it has been running happily for 24/7 for about 4 years (aside from the odd reboot) until it needed some recent tlc due to me messing it up . I tried ME once, my PC was dead within a week
I don't have any issues with XP Pro, running it at home 24/7 since I built the machine a year or two back - never needed a format, and very very rarely locks up [that is usually because I have really pushed it with the multi-tasking].
Also got the XP Pros running at work, on the domain