Virtualbox install 12.04 guest: "pae not present"

I get this message while trying to install Ubuntu 12.04 as a guest in VirutalBox 4.1.18, on an Ubuntu 10.04 host.

This kernel requires the following feature not present on the CPU: pae

Some host specs:

• The host's kernel is: Linux 2.6.32-41-generic-pae GNU/Linux
• lscpu (host): Architecture: i686, CPU op-mode(s): 32-bit, 64-bit
• grep --color=always -i PAE /proc/cpuinfo   does show pae in its output.

The 12.04 iso used is: ubuntu-12.04.0-desktop-i386.iso

As a comparison/check, I downloaded and installed Linux Mint 13 Cinnamon to the same host on the exact same VM (I just changed the .iso image). It worked fine. Its iso is: linuxmint-13-cinnamon-dvd-32bit.iso

It seems (to me) that I have pae.. what is going on here?

Update: I had assumed that Linux Mint also required pae (being Ubuntu based), but I've just run;   grep --color=always -i PAE /proc/cpuinfo   in the Mint VM.   It showed no output.   So it seems the issue may lie with VirtualBox.   If that is the case, how can I get Virtualbox into pae mode?

On VirtualBox Manager, open your virtual machine configuration then select System on the left side and open the Processor tab. Be sure that Enable PAE/NX is checked.

For commandline

VBoxManage modifyvm <VM_name> --pae on