One thing you must do is to make sure that you can always boot the 'previous' kernel in case something goes wrong with the kernel you are working on:
-Making sure you can boot previous, working kernel-
In /boot there should be, among other files, a vmlinuz and a System.map.<number><name>
copy these to vmlinuz.working and System.map.working ('working' is just an example).
If you use grub (suse 8.2 standard) you also need to add this new bootoption in /boot/grub/menu.lst
If you decided to use lilo instead of grub add the extra bootoption in /etc/lilo.conf and run /sbin/lilo to activate.
During reboot there will be an extra option which allows you to boot the 'working' (=previous) kernel.
Depending on your own whishes you can do one of the following things:
1) Get a fresh, newer (newest??) kernel from www.kernel.org,
untar this in /usr/src
link linux to linux-2.x.y (ln -s linux-2.x.y linux)
You might need to rename /usr/src/linux to /usr/src/linux-2.x.y first.
2) If you like to work on the kernel that Suse provided. Get it of one of the cd's [kernel-source -> The sources of the SuSE kernel] and install it.
Always check the following line in /usr/src/linux/Makefile
If this line is commented out, uncomment it.
If you don't your compiled stuff will be put in / and not in /boot !!