When I issued the commad:

emerge -u world

My kernel was upgraded form 2.4.20-gentoo-r5 to r6. Among other things.

This is what it said just befoe finishing?

>>> /usr/src/linux-2.4.20-gentoo-r6/COPYING
>>> /usr/src/linux-2.4.20-gentoo-r6/REPORTING-BUGS
>>> /usr/src/linux-2.4.20-gentoo-r6/CREDITS

* After installing a new kernel of any version, it is important
* that you have the appropriate /etc/modules.autoload.d/kernel-X.Y
* created (X.Y is the first 2 parts of your new kernel version)

I show a kernel-2.4 and a kenrel-2.5 in /etc/modules.autoload.d/

bash-2.05b# etc-update
Scanning Configuration files...
The following is the list of files which need updating, each
configuration file is followed by a list of possible replacement files.
1) /etc/init.d/hdparm
/etc/init.d/._cfg0000_hdparm
2) /etc/kernels/genkernel
/etc/kernels/._cfg0000_genkernel
Please select a file to edit by entering the corresponding number.
(-1 to exit) (-3 to auto merge all remaining files)
(-5 to auto-merge AND not use 'mv -i'): -3

Replacing /etc/init.d/hdparm with /etc/init.d/._cfg0000_hdparm
mv: overwrite `/etc/init.d/hdparm'? y


Replacing /etc/kernels/genkernel with /etc/kernels/._cfg0000_genkernel
mv: overwrite `/etc/kernels/genkernel'? y

Exiting: Nothing left to do; exiting.


If I do a "uname -a", it shows that I'm still running 2.4.20-gentoo-r5.

Did I do the right thing after upgradeing or do I need to reboot as well?

Is there some type of Standard Operating Proceedure after doing an "emerge sync" ,"emerge -u world" and/or right after downloading anytype of application..I.E. ethereal, Gaim, ect..ect.. that I should be following for best practices?

Can I download other applications (tar.gz's) that aren't included in the portage tree without effecting Gentoo in anyway?

The kernel is just downloaded - not installed.You are still running your original kernel.If you want to change that you have to first of all make sure thatthe symlink /usr/src/linux points to your new kernel and then configure,compile,set up the bootloader.
Then you have to reboot and pray.
Normally the old apps get unmerged when you install a new version - not the kernel though.
You can install anything you want to but the dependencies will not be tracked by portage since it is not in the tree - meaning that the app that is not included could break when you upgrade other things since the libs the app depends on and portage doesn't know about could be deleted.
You basically need to write an ebuild for the app and include it in your portage tree to be on the safe side - needless to say I never did that.

First of all, I don't generally bother with etc-update as it's far too fiddly to use. I use a far more convoluted approach of locating all the new cfg files, diffing them against my installed versions, migrating the changes into the new ones and then replacing them all by hand. This is the task etc-update is supposed to automate but I've yet to figure out just how to make it do that.

Second, I use the --deep or -D switches in conjunction with -u (ie emerge -uD world) because this performs a much more thorough (albeit more risky) upgrade as it drills further down into a packages dependency tree than just -u on it's own. While we're on the subject of upgrades, have you edited and uncommented the ACCEPT_KEYWORDS line in make.conf to reflect your architecture (~x86) and then emerge sync && emerge -uD world ?. I recommend also doing that as it opens up even more up to date packages by allowing packages that are considered "development" or "testing." The risk here is that you'll get the occasional unstable package (like Gaim 0.64 a while back) but these generally get hard-masked and downgraded quickly enough.

Third and lastly, I don't bother with genkernel, I emerge the sources (I use xfs-sources as my disk partitions are formatted as XFS but if you don't need that then gentoo-sources is also a good choice) and then run the configurator manually to make a kernel tailored to my system. I also have to apply a patch to the my kernel to enable nForce2 AGPGART support which makes using genkernel impracticaly but even if I didn't have to I'd still build a kernel from scratch as it gives you the highest level of performance.

Thanks for the input everyone.

I've successfully upgraded the kernel and have got everything working except adding some netfilter modules to the kernel.

New thread for that though.

I've used all of the suggestions in this post without harm so far.

Thanks allot.