 This phase I trial is studying the side effects and best dose of tipifarnib and etoposide in treating older patients with newly diagnosed acute myeloid leukemia. Tipifarnib may stop the growth of cancer cells by blocking some of the enzymes needed for cell growth. Drugs used in chemotherapy, such as etoposide, work in different ways to stop the growth of cancer cells, either by killing the cells or by stopping them from dividing. Giving tipifarnib together with etoposide may kill more cancer cells 