If you comment out all the package removals, it "works." By works, i mean it seems to install all the packages, but the resulting anaconda-ks.cfg file in /root does not have anything meaningful in the %package section. It almost seems like package selection in the kickstart files is not supported anymore? I have not found a similar bug on bugzilla which makes me wonder if something changed and I'm not aware? if not I will file a bugzilla bug. Doing a graphical install of FC4 on all our machines would take forever!
See https://bugzilla.redhat.com/bugzilla/show_bug.cgi?id=160209. The quick explanation is that we added support to exclude by architecture at the last minute and broke the normal case. A workaround would be to append ".i386" or whatever to the names of the packages you want to exclude. - Chris