The reason the system has become unusable probably stems from having made the modules and installed them. You failed to compile the kernel, so you're running on your old stock kernel, but your system is trying to run on the new modules... RH leaves a default of having 'version symboling on the modules', meaning that your modules will only work with a kernel that you never got compiled.
You can re-RPM the whole kernel from the CD, or prefereably: get a pristine copy of the kernel source from kernel.org. The newest is 2.4.17 (In a day or two 2.4.18), and compile and use that instead. If you do, remember to remove the simlink between /usr/src/linux and /usr/src/linux-2.4.2-?. Pristine kernel source will unpack into a dir called linux/ so if that symlink exists it will deposit all of the source over the 2.4.2 source and render the both of them un-compileable. Patching a kernel source tree up a notch is pretty worthless unless the next minor version doesn't exist yet. For instance, taking 2.4.17 to 2.4.17-rc2 is a matter of 9 patches... but in a day or two when 2.4.18 comes out I'm not going to bother with a mountain of patches... I'm just going to skip to snagging the whole new kernel. I just realized this isn't always fasible for people with modems... kernels these days are 30Mb, compressed.
Either way, g'luck