Lilo looks in the root directory for the file to boot,
which is usually a link to an actual kernel image in
the boot directory. I'm assuming you are copying your
zImage (or bzImage) to the /boot directory. You must
then go to root and add a link to the image in /boot,
by some name you choose. Then you must reference that
link name in lilo.
Hope that makes sense.
My lilo.conf looks like this:
boot = /dev/hda
compact
delay = 100 # optional, for systems that boot very
quickly
vga = normal # force sane state
root = /dev/hda2 # use "current" root
default = linux
image = /vmlinuz
label = old
image = /vmlinuz_new
label = linux
other = /dev/hda1
table = /dev/hda
label = 98
In my root directory (/) I have links by the name of:
vmlinuz and vmlinuz_new
vmlinuz_new links to /boot/new_vmlinuz-2.2.19 (my
generated kernel)
vmlinuz links to /boot/vmlinuz-2.2.19 (my original
install kernel)