I just had to recompile kernel a few times, so here's my 2 cents:
I was trying the 2.6.18 and 2.6.19 kernels and both have in the fb section configuration to enable the nvidia framebuffer directly in kernel. If you want to install the driver from www.nvidia.com
, you can't select any nVidia drivers, because they would conflict with the proprietary one.
However if you enable the VESA fb, you still get vesafb console (although it is not accelerated nvidia). When you start X after installing the nvidia driver, an nVidia driver takes care of the graphic jobs.