Hi Bob!
> What have I done wrong? Any suggestions appreciated.
Can you show us the output of mount? And which harddrives and partitions do you have?
What is the hda2 and hda3 in your fstab? Do you see a boot folder with a newer kernel there?
I think the Label assignments in fstab and maybe /boot/grub/menu.lst confuses the installation process.
You can safely replace Label assignments in fstab with the real partition. So
LABEL=/1 / ext3 defaults 1 1 LABEL=/boot1 /boot ext3 defaults 1 2
becomes for example
/dev/hda2 / ext3 defaults 1 1 /dev/hda1 /boot ext3 defaults 1 2
Afterwards you can use rpm -Uhv /mnt/cdrom/Fedora/RPMS/kernel-2.6.5-1.358.i586.rpm to install the kernel again from the 1st Fedora CD.
Regards Philipp Ott