if you use a recent kernel (2.6 series) then you can run it simply like this (this first step is the menuconfig above, so you know where we start):
make menuconfig (disabled rivafb)
and you're set. then you get the following files (you sit in the source directory's root at the moment, where you did this):
now you simply copy the files to your /boot (do NOT overwrite existing files; instead, rename these new files a bit like adding -2 to the end of the filename or something so they do not overwrite anything) and after that edit your LILO's config file. locate the section that tells about the current kernel, copy it and paste below the first section (so now you have two identical sections of a kernel and boot options), and then simply alter the lower section so that it points to your newly copied files. save, run lilo (this is important when your booting has changed!) and reboot.
you could have overwritten the older kernel files, and editing LILO's config would have been unnecessary, but this way you're safe - if your new kernel refuses to boot (kernel panic or something) for some reason, you can always reboot the older kernel that still sits in your LILO. nice
after you have tested that your newer kernel works, you can safely remove the older kernel from /boot and LILO's config (remember to always re-run lilo after changing the boot config, so lilo recognizes the changes).