I have a lot of trouble lately installing on a box that i can't reboot or change the kernel. Is there any other package that supports gre tunnels (if the os supports ) that i can run on linux? Basically i want linux on linux. I can't yum upgrade or reboot.
Wikipedia has a comparison of platform virtual machines. If you want to use a stock 2.6.18 kernel, there aren't many options.
For full virtualization, VirtualBox and VMware should work, but you may need to use older versions if their kernel module no longer supports such an old kernel. KVM may be a possibility, but it was only included in the stock kernel as of 2.6.20, and I don't know how hard it is to get it running on 2.6.18. Another possibility is Qemu; QEMU can be very slow because it fully emulates a processor rather than using the host processor's virtualization capabilities, but it doesn't need any low-level support on the host, it runs as a perfectly ordinary process.
There are many options for virtualizing Linux on Linux (cgroups/LXC, OpenVZ, VServer), but they require a custom or recent kernel. The one option that I think is suitable for you is User-mode Linux. UML lets you run a Linux system as an unprivileged process on the host system. It has existed for a long time, so an old host kernel won't be a problem. It takes a bit of work to set up (there are howtos around), but after that it should provide what you need.