What version did you upgrade from? 10.2.6? Or something lower ... ??

Basically it's telling you that it can't start the bash (I think sh is bash?) shell. Have you tried going into the Disk Utility and correcting permissions for your system partition?

Hey Dani,

What about Zapping the PRAM? If I'm not mistaken, you boot it up with the disk in, hold down the Apple, Option, P, and R keys at the same time and let it restart 4 times. On the fourth time you hear the start up sound, you let go of all the keys and it should boot from the CD.

I think......

Correct me if I'm wrong. I don't know it all and am always willing to learn more. I haven't had to zap the PRAM in a Mac since using OSX, so I may not have the key combination right.....