Here's what you do:
1. make menuconfig
2. go to Processor Type and Features -> Processor Family -> select (X) Pentium-4/Celeron(P4-based)/Pentium-4 M/Xeon
3. Go to Symmetric multi-processing support -> and enable it
4. Enable SMT (Hyperthreading) scheduler support (NEW) (right below flag for #3)
5. Go to the preemption mode, set it for low-latency for preemptive rather than cooperative multitasking
Compile, install, etc.
When booting to the new kernel, check /proc/cpuinfo - two processors should be identified if the logical processors were enumerated. You can go one further and check the flags to make sure that it's actually hyperthreading-aware for optimal performance:
flags : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush dt s acpi mmx fxsr sse sse2 ss ht tm pbe pni monitor ds_cpl cid xtpr
Look for the 'ht' flag on each (logical) processor.
Incidentally, I went through a heck of a time getting hyperthreading recognized the first time I compiled the kernel on a hyperthreading box. I went through the SMP options and recompiled several times and each time it was enumerating the logical CPUs as two physical CPUs (just like the out of the box kernel did), which can lead to performance degradation in some(many) cases. Finally I noticed the problem: I had set the CPU type to( ) 586/K5/5x86/6x86/6x86MX, not realizing that there were additional processor options. Just giving you the heads up on that so you don't make the same mistake.