It's weird because I have a nearly identical box and setup and I can update the ovzkernel-PAE* just fine but on this box it doesn't work.
I only get this error with the openvz.repo and not others such as Centos-Base.repo
With my other server it works normally:
================
Setting up Update Process
Resolving Dependencies
--> Running transaction check
---> Package ovzkernel-PAE.i686 0:2.6.18-238.12.1.el5.0........
I've never understood how to enable and disable services for different run levels in Debian based distros, it's just weird, annoying and doesn't make sense. I much prefer chkconfig from RHEL.
Just install the package called 'rcconf' and be done with it. rcconf makes things easy for you.
apt-get install rcconf
Reading package lists... Done
Building dependency tree
Reading state information... Done........
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