How do I set it up?

First get the necessary parts: A suitable kernel and the latest modules package. Then you should install the module utilities as per the instructions included in the package. Pretty simple: Just unpack the sources and run make install. This compiles and installs the following programs in /sbin: genksysm, insmod, lsmod, modprobe, depmod and kerneld. I recommend you add some lines to your startup-scripts to do some necessary setup whenever you boot Linux. Add the following lines to your /etc/rc.d/rc.S file (if you are running Slackware), or to /etc/rc.d/rc.sysinit if you are running SysVinit, i.e. Debian, Corel, RedHat, Mandrake or Caldera:

        # Start kerneld - this should happen very early in the
        # boot process, certainly BEFORE you run fsck on filesystems
        # that might need to have disk drivers autoloaded
        if [ -x /sbin/kerneld ]
        then
                /sbin/kerneld
        fi

        # Your standard fsck commands go here
        # And you mount command to mount the root fs read-write

        # Update kernel-module dependencies file
        # Your root-fs MUST be mounted read-write by now
        if [ -x /sbin/depmod ]
        then
                /sbin/depmod -a
        fi

These commands may already be installed in your SysV init scripts. The first part starts kerneld itself. The second calls depmod -a at startup to build a list of all available modules and analyzes their inter-dependencies. The depmod map then tells kerneld if one module needs to have another loaded before it will itself load.

Next, unpack the kernel sources, configure and build a kernel to your liking. If you have never done this before, you should definitely read the README file at the top level of the Linux sources. When you run make xconfig to configure the kernel, you should pay attention to some questions that appear early on:

  Enable loadable module support (CONFIG_MODULES) [Y/n/?] Y

You need to select the loadable module support, or there will be no modules for kerneld to load! Just say Yes.

  Kernel daemon support (CONFIG_KERNELD) [Y/n/?] Y

This, of course, is also necessary. Then, a lot of the things in the kernel can be built as modules - you will see questions like

  Normal floppy disk support (CONFIG_BLK_DEV_FD) [M/n/y/?] 

where you can answer with an M for "Module". Generally, only the drivers necessary for you to boot up your system should be built into the kernel; the rest can be built as modules.

When you have gone through the make config, compile and install the new kernel and the modules with make dep clean bzlilo modules modules_install.

Phew.

    PID TTY STAT  TIME COMMAND
     59  ?  S     0:01 /sbin/kerneld

  osiris:~ $ mdir a:
   Volume in drive A has no label
   Volume Serial Number is 2E2B-1102
   Directory for A:/

  binuti~1 gz       1942 02-14-1996  11:35a binutils-2.6.0.6-2.6.0.7.diff.gz
  libc-5~1 gz      24747 02-14-1996  11:35a libc-5.3.4-5.3.5.diff.gz
          2 file(s)        26689 bytes

  osiris:~ $ /sbin/lsmod 
  Module:        #pages:  Used by:
  floppy            11    0 (autoclean)