I dont see anything wrong with the instructions you have posted.
if you want to build a new kernel version the easiest way to do it would be
1) download the source
wget
http://www.kernel.org/pub/linux/kernel/v2.6/linux-2.6.32.1.tar.bz22) extract it in the /usr/src dir
cd /usr/src
tar xvf linux-2.6.32.1.tar.bz2
cd linux-2.6.32.1
3) copy the VL-config file
cp /boot/config .config
4)run the make menuconfig command to change kernel options
make menuconfig
5)run make to compile kernel
make
6)run make modules to compile modules
make modules
6) install the modules
make modules_install
7) copy the kernel to /boot
cp .config /boot/config-2.6.32.1
cp arch/i386/boot/bzImage /boot/vmlinuz-2.6.32.1
cp System.map $PKG/kernel/boot/System.map-2.6.32.1

add the kernel to your bootloader