mine looks like yours
label linux
kernel boot/vmlinuz
append vga=788 splash=silent max_loop=255 initrd=boot/initrd init=linuxrc load_ramdisk=1 prompt_ramdisk=0 ramdisk_size=10000 root=/dev/ram0 changes=/dev/sdb2 rw
and my /dev/sdb2 is ext2 as you can see here. but ........
root:# mount
tmpfs on / type tmpfs (rw)
/dev/sda1 on /mnt/sda1 type vfat (rw)
/dev/sda2 on /mnt/sda2 type ntfs (ro)
usbfs on /proc/bus/usb type usbfs (rw,devgid=10,devmode=0666)
/dev/sdb1 on /mnt/vl-hot/sdb/vol1 type vfat (rw,noexec,nosuid,nodev,noatime,uid=0,gid=100,fmask=0111,dmask=0000,quiet,codepage=437,iocharset=iso8859-15)
/dev/sdb2 on /mnt/vl-hot/sdb/vol2 type ext2 (rw,noexec,nosuid,nodev,noatime)
/dev/sdb1 on /mnt/sdb1_removable type vfat (rw)
/dev/sdb2 on /mnt/sdb2_removable type ext2 (rw)
logged in as root. did a touch test.txt in / then rebooted and it was gone.
looking at dmesg I see the append line was read
Kernel command line: vga=788 splash=silent max_loop=255 initrd=boot/initrd init=linuxrc load_ramdisk=1 prompt_ramdisk=0 ramdisk_size=10000 root=/dev/ram0 changes=/dev/sdb2 rw BOOT_IMAGE=boot/vmlinuz
thoughts?