I went to http://www.libsdl.org to get SDL. I compiled and everything turned out fine. I then went to compile my pinball game running this:

and I got this at the end:

checking for SDL - version >= 1.2.0... yes
checking for IMG_Load in -lSDL_image... no
configure: error: *** libSDL_image not found! Make sure you have the development package of SDL_image installed - (www.libsdl.org) - or try to use the --with-sdlimage-prefix option

My question is, what is the difference between libSDL and libSDL-devel? I can only find libSDL-devel.rpm files on their website, but no source files. I want to do everything manually rather than RPM's. I really don't trust RPM's.

well libsdl is a library (maybe more)
libSdl-devel is the development package for this library (headerfiles etc)..
if you want to create an applications using libsdl then you need the development package.
if you get just a binary of the application it's probably dynamically linked to libsdl so you don't need the development package, but if you have the source of the application you may need the development package to be able to compile the application.
They have different packages for this because some people do not want the development packages, they do not have compilers installed and they think its just a waist of space.
If you downloaded and compiled and installed SDL by your self then you have the development files installed.
SDL_image is another package, as far i can see:
http://www.libsdl.org/projects/SDL_image/
install it,then make sure you do as root
/sbin/ldconfig
and try make clean before you do
./configure again.

I did not realize that SDL_Image was a totally separate thing. I installed it and everything works fine now. I can now enjoy my pinball game. Thanks for the help! Very much appreciated!

I used to play pinball in the Devils OS (wind0z)
I may also give it a try.