Hey Frank,
It looks like your problem might be that in your
lilo.conf file you still have:
image=/boot/vmlinuz-2.4.7-10
label=linux.bak
initrd=/boot/initrd-2.4.7-10.img
read-only
root=/dev/hdb1
try and comment all this out and use:
image=/boot/vmlinuz-2.4.9-31
label=linux
root=/dev/hdb1 read-only
initrd=/boot/initrd-2.4.9-31.img
instead.
Correct me if I'm wrong but I think the lilo.conf (as
well as every other file unless told otherwise) is
read sequentially.
Oh yeah also don't forget to run '/sbin/lilo' after
you edit lilo.conf
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