Thanks i am able to reboot with Power Kernel 48 now.

After installing the kernel Power (Bootimg) zImage-2.6.28.10-power48 is created in the /boot folder.

I than just created the .item file in the /Multiboot.d folder and it worked, i am able to boot in Power Kernel, but just for your info i tried your above steps where in if i Change the name of zImage file to Vmlinuz the phone doesn't boot in power kernnel.

This means the multiboot tries to find the zImage instead of the Vmlinuz. Any idea why would this be in my case, is this due to some changes in the new Bootimg i reinstalled?

Just to summarise

After creating the .item file for Power Kernel

1) zImage-2.6.28.10-power48 file in /Boot/Multiboot (system boots in power kernel)
2) zImage-2.6.28.10-power48 file in /Boot (system boots in power kernel)
3) zImage-2.6.28.10-power48 file copied to /Boot or /boot/Multiboot and renamed to vmlinuz-2.6.28.10-power48 (system will not boot in power kernel)