Why does machine have i686 kernel installed? Is this a problem?
 

Etch automatically chose, during the install, to put on kernel 2.6.18-4-686. uname -a confirms that this is one being used. Now I have a Intel Celeron processor. I was not aware that this was for i686, but then again, I know very little about such things. Did Debian do well or is there chance it did something bad that could cause problems? From manufacturer specs. page: "850 MHz Intel Pentium III processor."

Now are you using a Celeron or a Pentium III processor? Eitherway, as far as I know they both have the i686 instruction set, so debi did absolutely no mistake.

All Intel processors from the Pentium Pro (circa 1995) and up support the i686 instruction set.

http://en.wikipedia.org/wiki/I686