If you update your kernel using Yum, the new (binary) version is automatically "updated", i.e. new kernel is installed to your /boot and your bootloader's configuration is altered respectively. If you are sure the new binary kernel was installed, list the files under /boot and you should see the new kernel version there (vmlinuz-versionnumber and some other files); then just make sure it appears in your bootloader configuration (/boot/grub/menu.lst for Grub, or /etc/lilo.conf for LiLo - for LiLo remember to run lilo after altering the config, for Grub this step is not needed).
If you instead have updated the kernel sources (or installed them), you must compile the kernel yourself to be able to use it. As you probably use stock kernels, I suggest you just stick to them since they're easier (updating is automatic, no need for manual compiling every time and wondering which modules you want). Packages kernel-versionnumber differs from the same package that has ".src" or "-src" (means "source") in it's version number; binary kernel package installs the precompiled kernel, kernel source package installs just the source code for the kernel. For some drivers you need both the kernel and the source, and the versions must be exactly the same, but plain sources won't make you a kernel unless they're compiled.
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