I have compiled many kernels in my time & probably the single most important thing I've found is that a good configuration for one PC is NOT necessarily good for another! In fact, a config for one PC simply won't work for another unless they have identical hardware, even then each user will want their PC to perform different tasks so although the configs will work, the kernel you end up with might not do what you personally what it to!
You can, of course, do what most distro's do & compile every driver that the kernel has to offer as a module but this defeats the purpose of compiling a kernel for YOUR system!
My advice would be to get ALL the info about YOUR system, sift through EVERY SINGLE config option by means of :
or, if your not running X you will need to use :
learning about what each one does as you go, then select only the options that YOUR system will need & then compile.
This WILL take you many attempts as it did me when I first started building my own kernels but once you understand what you want from your kernel then you will be able to compile a kernel that makes your system boot much faster, run smoother & utilize all your hardware to it's maximum performance!
But as for the error message you posted, basically it means that the kernel cannot find the harddrive that your root filesystem (/) is installed on & so can't mount it to read all the data it needs to boot the system. This is usually because the driver that it needs to load in order access your particular HDD wasn't compiled with the kernel. So again, you need to know what config options are required for the HDD that YOU have installed!
Compiling your own kernel can be a very fulfilling & educational experience, but it does take patience & persistence but by the end of it you will know a great deal more about Linux, hardware & computers in general, things you should know if you wish to conquer the world of Linux!
I hope this has not scared you away from compiling your own kernel, it's not really as hard as it sounds! The guide Chinaman suggested is one of the best around but there is literally thousands of pages out there devoted to the subject!