It could be a problem with the way you downloaded it, like from a browser.. Sometimes firefox or IE saves it as .tgz.tar, where you will need to rename it to .tgz
EDIT: and sometimes for some reason the package itself is saved as .tgz.tar .. hmm.. anyway
use the command line program 'wget' to download swaret.
after wards rename it to .tgz and install it
mv swaret-1.6.2-noarch-1.tgz.tar swaret-1.6.2-noarch-1.tgz
change version to current
save it as swaret.conf
ctrl + o
enter, then ctrl + x
start it with
EDIT: for safety reasons, updating the kernel and lilo are disabled.. you can enable it when you wwant to by commenting the EXCLUDE line at the bottom of swaret.conf (just add a # before it).
But if you ever do upgrade the kernel (like from 2.4.29 to 2.4.30), after it finishes downloading and installing it, just type
before you reboot, so that your lilo will be updated.