First install the kernel source.
Then open a console and log in as root.
$ make mrproper
$ make clean
$ make xconfig
Select and deselect as you please but be carefull!
When this is finished you should start compiling and installing your new kernel.
$ make bzImage
$ make modules
$ make modules_install
$ make install
Voila, your finished. All you need to do now is reboot and select your new kernel from lilo.