I can only make guesses here, since I don't know what's running in your guest. This does not look like vanilla Windows 7. I suspect that there is something else there, running in supervisory mode, which has (a) taken over the interrupt descriptor table from Windows 7, and (b) improperly makes use of some new Sandy Bridge feature. It gets an undefined instruction exception (which would cause a blue screen if Windows 7 were actually in control), and it doesn't have any way to deal with it, so it panics.
By lying to that software about the nature of the CPU, we can convince it not to make use of the new Sandy Bridge features, and it runs correctly.
If you're not aware of such software, you may have a virus or other malware, probably with some kind of Linux heritage. It's a bit odd, though, for malware to generate a panic message.
Do you have anything unusual installed in this guest?