Some more updates...
I tried debian on that system and it (woody) installed fine. That system was going to be a pptp server, and to put in mppe I had to compile the kernel. I d/l the latest 2.4 compiled with megaraid and aic7xxx driver. but that refused to boot with the same error as the RH installer. At this point I got more interested and got the debian 2.4 kernel, and the results were same. no boot.
So I got the 2.2.25 and compiled, and it worked fine!!
So this is not to do with the anaconda but with the kernel. That particular device does not seems to work with 2.4 but works fine with 2.2. Usually it happenes the other way round.
Any one with any clue about this observation of mine? How can I get 2.4 work on that hardware?
raj
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