Image courtesy virtualbox dot org

VirtualBox from Oracle is a great application to run other Operating Systems within the native OS.
We installed virtualbox-4.2_4.2.12-84980~Ubuntu~quantal_amd64.deb on a machine with Ubuntu Gnome 64bit. While it showed no error in installation, but when run, it started to display following error:

Kernel driver not installed (rc=-1908)
The VirtualBox Linux kernel driver (vboxdrv) is either not loaded or there is a permission problem with /dev/vboxdrv. Please reinstall the kernel module by executing
‘/etc/init.d/vboxdrv setup’
as root. If it is available in your distribution, you should install the DKMS package first. This package keeps track of Linux kernel changes and recompiles the vboxdrv kernel module if necessary.

So first we installed DKMS by running a command from terminal “Sudo apt-get install dkms”. This installed DKMS. Now as suggested in above error message we tried running ‘sudo /etc/init.d/vboxdrv setup’ and we were provided with another error message:

 * Stopping VirtualBox kernel modules                                    [ OK ]
 * Uninstalling old VirtualBox DKMS kernel modules                       [ OK ]
 * Trying to register the VirtualBox kernel modules using DKMS
Error! Your kernel headers for kernel 3.5.0-27-generic cannot be found.
Please install the linux-headers-3.5.0-27-generic package,
or use the –kernelsourcedir option to tell DKMS where it’s located
* Failed, trying without DKMS
* Recompiling VirtualBox kernel modules
* Look at /var/log/vbox-install.log to find out what went wrong

The log file at /var/log/vbox-install.log had these entries:

Uninstalling modules from DKMS
removing old DKMS module vboxhost version  4.2.12
Deleting module version: 4.2.12
completely from the DKMS tree.
——————————
Done.
Attempting to install using DKMS
Creating symlink /var/lib/dkms/vboxhost/4.2.12/source ->
                 /usr/src/vboxhost-4.2.12
DKMS: add completed.
Failed to install using DKMS, attempting to install without
Makefile:181: *** Error: unable to find the sources of your current Linux kernel. Specify KERN_DIR= and run Make again.  Stop.

At this stage we needed to install group accounts by installing ‘sudo apt-get install gnome-system-tools’. This installs GUI group accounts settings. After it was installed, opened Group Accounts and in groups selected group ‘vboxusers’ and underneath it, in the list checked on box before the user name which in this case was ‘sb’. And closed it. Now time for final step. Open terminal and run this command:

sudo apt-get install linux-headers-generic

After the headers are installed run the ‘sudo etc/init.d/vboxdrv setup’ again and it should work. BTW this version of VirtualBox has added bidirectional drag and drop as well.
All the best!