I recenty installed RH9 on my pavilion 5202, and had the exact same video issues, down to the unreadable video error blue box. If you hit.. umm I think it was Yes, it'll give you a screen you can read, and if you hit no twice it like, drops out to the shell if I remember..
http://www.europe.redhat.com/documen.../s1-video.php3
I reread through the online redhat installation documentation and learned how to tinker with the redhat-config-xfree86 command a little, and got my GUI to work (well, mostly) after a little bit.
I recommend reading the docs closely and examining your monitor and driver specs VERY closely, as you can fry the screen if you mess up the refresh too much..
Good luck, and know you aren't the only one who's cursing HP while they try to install redhat!