There are two things that are, most likely, the problem here.
1. When you compiled your new kernel did you include devfs and /dev/pts support into the kernel and also select the "start at boot time" option. Even though one of them says "deprecated" or "obsolete" it seems many people have the problems you guys are having until they build this support into the kernel.
Also make sure you included the following line into your fstab file which is in /etc/fstab:
Code:
none dev/pts devpts defaults 0 0
2. The other problem would be somewhere in your bootloader syntax. If you post a copy of your bootloader here (Grub or Lilo) so we can look at it maybe we can rule out if that is what is causing your problems.
rberry88