You need to install the kernel-devel package, not the kernel source. You can use the kernel source, but then you actually have to build the kernel.
Check that you have matching kernel and kernel devel packages with (this is an example from an FC4 system):
# rpm -qa | grep "kernel"
kernel-2.6.16-1.2108_FC4
kernel-2.6.16-1.2111_FC4
kernel-devel-2.6.16-1.2108_FC4
kernel-devel-2.6.16-1.2111_FC4
If you don't have the kernel-devel package installed:
yum -y install kernel-devel
Also, the current 8xxx drivers are causing problems on some hardware. If you experience problems after an apparently successful install you can visit the
nVidia forum. In particular, there's a sticky howto for FC5.