MacOS – Kernel panic at shut down

It appears to be, as you suspected, the Android emulator that is causing the issue. Some users have filed an issue on Google Code. If you scroll down past all of the "Me Too's," you'll actually find useful information; there appears to be a workaround involving /Applications/Eclipse.app/Contents/MacOS/eclipse.ini for some.

I increased the heap space used by Eclipse, and haven't experienced this problem since.

In eclipse.ini I used the following values:

--launcher.XXMaxPermSize256m

-Xms256m

-Xmx1024m

The same issue has a duplicate. In this thread, they mentioned a slightly different method where they added -vmargs between --launcher.XXMaxPermSize256m and -Xms256m

And I assume you've installed Intel Hardware Accelerated Execution Manager, as this is a requirement for the Android Emulator. However, in the comments, people note that it doesn't work with Mountain Lion and they had to disable it for Android Emulator to work.

For your question about the number of installs Lion from the App Store will give you, this is directly from Apple's EULA (emphasis added):

(i) to download, install, use and run for personal, non-commercial use, one (1) copy of the Apple Software directly on each Apple-branded computer running Mac OS X Snow Leopard or Mac OS X Snow Leopard Server (“Mac Computer”) that you own or control;

So, assuming that this is for personal, non-commercial use, Apple lets you install Lion as many times as you like on the Macs that you own or control.

It is probably your video card. The 2007 MBP's were prone to this.

Here is how you can tell. Download the Ultimate Boot CD. Burn it to a DVD or a USB Stick

You will launch Linux with a ton of useful diagnostic tools. Run everything, but especially the video display diagnostic tool.

Mine was throwing errors and I was able to definitively find the cause of the problem. I was able to find a guy in Tampa that would upgrade the video card on the Logic Board for about $100. I did the service and it worked great. MBP still running to this day. Let me know if you are interested and I will post his info.