The only problem with official ubuntu 7.10 is it comes with upstart, ubuntu 
replacement for sysvinit. Upstart in VE requires a little change from vzctl to 
work properly. This will be released soon in vzctl-3.0.20.

For now, you have the following options:

1. Recompile vzctl from git.
2. Recompile vzctl with a patch from http://bugzilla.openvz.org/662
3. Use "contributed" ubuntu-7.10 template which doesn't have upstart.
4. Replace upstart with sysvinit in your VE/template.
--
Kir Kolyshkin
http://openvz.org/development/
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