PAE stands for P-hysical A-ddress E-xtension to access 4 GiB RAM on 32-bit systems. This is not needed for a 64-bit Ubuntu.
for 11.10 and earlier
For 32-bit Ubuntu a PAE kernel is automatically downloaded and installed on a system with more than 3 GB of RAM. Otherwise, and if no network connection is available the generic kernel is used.
for 12.04 LTS
Note that from Ubuntu and Kubuntu 12.04 LTS a PAE kernel only can be installed from the 32-bit installation CD. This may cause problems on old hardware when the CPU does not support PAE.Release Notes
In this rare cases we may have to install 32-bit Lubuntu or Xubuntu that still come with a non-PAE-kernel. We can install the Unity desktop later. Alternatively we may also install 32-bit 10.04 or 11.10 with the non-PAE kernel first. With an upgrade to 12.04 a non-PAE-kernel can also be upgraded to a non-PAE-kernel.
Ubuntu 12.04 LTS is the last release to support a non-PAE kernel.