Hi,
I "upgraded" my kernel to 2.4.20 using the rpm from a red-hat mirror.
In order to satisfy dependencies I had to install filesystem 2.1.0 and upgrade modutils, mkinitrd, e2fsprogs, initscripts, dev and iptables.

now when I boot, after it says press I for onteractive start u, it checks the root filesystem ok, then module dependencies, then fails on /dev/hda8 (which is my /home partition), with the message fs.ext2??? (i cant remember exactly) failed returning error 11.
It drops me into shell called "repair filesystem", from where I can mount the partion and read it ok, "file -s /dev/hda8" tells me that it is a ext3 filesystem and "stat /dev/hda8 " returns more info about it, but gives no clues about how to repair it

How do I repair this?

Take a look at /etc/fstab --- does that tell the OS it is an ext2 file system or ext3 (which it is)? If the number is wrong, change it and everything should boot just fine. If you can mount the disk in single user mode and there are no errors it has to be a configuration issue.