Yes, it's normal... When you up2date a system, and they give you a new kernel, it keeps the old one(s) for safety reasons. If the new kernel doesn't work, then you can always fallback to the old one.
I wouldn't remove it. It's only taking up a couple megabytes of disc space. It might come in handy some day. If it was a different kernel version, such as 2.4.18 to 2.4.19 or .20, then you would also have a directory in your /lib/modules that would be for your old kernel. Since they're both 2.4.18, then all you should have there is /lib/modules/2.4.18 . My stock 2.4.20-8 for RH9 uses 29MB in it's modules directory, because the stock kernel has nearly all the options set as modules, so it can be used with a ton of hardware.
If you do want remove it, you can, as long as the new kernel runs properly. Open your lilo.conf or grub.conf, depending on which you use, and look at the files the entry for the old kernel uses in /boot . Most likely...
Make sure they are different than the ones used by the new kernel. You can then delete the entry for the old kernel out of the lilo or grub .conf, and then the corresponding files in /boot .