Solution: Add "reboot=b" to kernel parameter (for Grub, it is inside /boot/grub/grub.conf)
For 64-bit OS, you may need "reboot=p,e,f"
Here is a excellent link about this topic
http://linux.koolsolutions.com/2009/08/04/howto-fix-linux-hangfreeze-during-reboots-and-restarts/
Update (July 3, 2012) : The following also fix the problem:
"VT for Direct I/O" from the bios
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