That's right, ATIs and Linux don't play too well together (although I heard quite a few saying they're happy with their cards).
However, first of all, it's spelled kernel instead of kernal (see my sig as well).
Second, I have a Radeon 9200SE as well and it's working at the same parameters as yours. A color depth of 24 bits is actually the maximum you can get (there is an explanation in the kernel's documentation if you want to know more).
Anyone know of any good guides, and or step by step (and I mean step by step!) instructions? I have no knowledge of kernals, or kernal modules, etc.
I can provide you a set of configuration options that works on my machine (no guarantees it will work on another one), but first take a tour through these pages to get yourself used to what a kernel compile actually means: http://www.google.com/search?q=linux+kernel+howto.
So, here's one configuration that *might* work:
CONFIG_AGP_chipset=m (select the chipset present on your motherboard)
# CONFIG_FB is not set (uncheck this option)
All the other settings are at your option, so I suggest you once again to actually look through the google search pages before complaining about your new-not-working kernel. And also, there may be other kernel configurations that may allow your card to work properly, so make google your best friend.