Frustration indeed! Its wonderful to have help, thank you.
Here are the last entries of the access_log:

0 4440 "http://linuxhost1/" "Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.4) Gecko/20030624 Netscape/7.1"
linuxhost1.localdomain - - [17/Oct/2003:14:17:00 -0400] "GET / HTTP/1.1" 200 49602 "-" "Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.4) Gecko/20030624 Netscape/7.1"
linuxhost1.localdomain - - [17/Oct/2003:14:23:06 -0400] "GET / HTTP/1.1" 200 49469 "-" "Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.4) Gecko/20030624 Netscape/7.1"
linuxhost1.localdomain - - [17/Oct/2003:14:23:07 -0400] "GET /favicon.ico HTTP/1.1" 404 315 "-" "Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.4) Gecko/20030624 Netscape/7.1"
linuxhost1.localdomain - - [17/Oct/2003:14:23:07 -0400] "GET /index.php?=PHPE9568F34-D428-11d2-A769-00AA001ACF42 HTTP/1.1" 200 2962 "http://linuxhost1/" "Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.4) Gecko/20030624 Netscape/7.1"
linuxhost1.localdomain - - [17/Oct/2003:14:23:07 -0400] "GET /index.php?=PHPE9568F35-D428-11d2-A769-00AA001ACF42 HTTP/1.1" 200 4440 "http://linuxhost1/" "Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.4) Gecko/20030624 Netscape/7.1"
~

Last entries of error_log:

[Fri Oct 17 14:16:53 2003] [notice] Digest: generating secret for digest authentication ...
[Fri Oct 17 14:16:53 2003] [notice] Digest: done
[Fri Oct 17 14:16:54 2003] [notice] Apache/2.0.40 (Red Hat Linux) configured -- resuming normal operations
[Fri Oct 17 14:19:19 2003] [warn] child process 2834 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2835 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2836 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2837 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2838 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2839 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2840 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2838 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2839 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:19 2003] [warn] child process 2840 still did not exit, sending a SIGTERM
[Fri Oct 17 14:19:20 2003] [notice] caught SIGTERM, shutting down
[Fri Oct 17 14:22:46 2003] [notice] Digest: generating secret for digest authentication ...
[Fri Oct 17 14:22:46 2003] [notice] Digest: done
[Fri Oct 17 14:22:47 2003] [notice] Apache/2.0.40 (Red Hat Linux) configured -- resuming normal operations
[Fri Oct 17 14:23:07 2003] [error] [client 192.168.1.101] File does not exist: /var/www/html/favicon.ico
"error_log" 440L, 39295C 440,1 Bot

I FOUND IT! IT WAS THE DARN FIREWALL!
In the redhat security level configuration the eth0 was not checked as a trusted device. All i had to do was check it and include options for www(http) and ftp. Everything seems to be working fine now.

Thanks mylo2003

"sometimes the best learning comes by accident"

Cool! Glad to see you are all up and running finally!