Whenever I boot up my computer (PC w/Windows 95) I get and error box
that says the system will be shut down. If I click it off fast enough
it will not shut down.  However, if it does it say there is a  error
in Kernal 32.  What is Kernal 32 and how do I fix the error
permanently.

If you have a Windows 95 CD, it would probably help to reinstall
Windows.  Kernel32.dll is one of the core components of Windows 95. 
If this file is corrupted, Windows will not be able to function.

Yes, a reinstall of windows is probably in order.

Sometimes in newer versions of windows if i close a running program
that windows "needs" to function correctly (scvhost.exe i think?)
windows will tell me that it lost one of its "really important
programs!" and will shut down in a few seconds. Clearly, if the pc
doesn't stop working right away, the program probably isn't necessary,
but nonetheless windows refuses to let you run without it.
Unfortunately, if such program is corrupted or missing, your only sure
shot is to reinstall windows. With windows 95, this is pretty easy if
you have the retail install disc, since all a reinstall does it
refresh your system files to the versions they started with. Typically
you do not lose any of your computer's settings, nor should you have
to reinstall any programs.

Kernal 32 - THE OSE Real-time Operating System is the first
commercially available RTOS that is certified stand-alone according to
IEC 61508 and is certified according to DO178B. Kernal 32 Kernal 32


Multi-processor - The core of OSE Systems' business has always been
the development of time-critical and highly reliable RTOS and time
saving, efficient, development tools.

Source: http://www.ose-systems.com

Have you tried scandisk or disk defragmenter under
start->programs->accessories->system tools->scandisk/disk
defragmenter?  If you have already done that, you will have to backup
your data, reformat and reinstall windows.