Hello my first post!

I installed slack 10 everything is A-ok. Except I found out /usr/src did not
have 2.4.28 tar.bz2--I was looking for /usr/src/linux. So I downloaded it.
I made a directory called linux-2.4.28. I cd'd into this unbzipped. Then another directory was made, linux-2.4.28. It's redundant directory name. Will this naming affect my recompiling efforts in the future?

I'm scared to do anything because of this.

When you unzip a .bz2 file, it creates a new directory. Just delete the one you created.

extract the .bz2 file, it will create a new directory, and leave the tarball as well. just move the newly-created dir to /usr/src. then cd into /usr/src, and create a link to the new dir:

ln -s linux-2.4.28 linux

i think the kernel source directory has to be the actual compile directory where your kernel was built
not just a fresh source download
your distribution had no doubt a package kernel-source or whatever that is proper and installs to the right place.
The kernel can be built anywhere and the build directory will work just fine

/usr/src/linux is something left over from days long gone and was traditionally just a symbolic link to the current running kernel source directory -- this is no longer needed -- but shouldn't hurt anything
the proper link now is made when you install the kernel and is in /lib/modules/`uname -r`/build