The Rawhide modutils-2.1.121 appears to be compiled to use only /lib/modules/`uname -r` and /lib/modules as the search path for modules, unlike the RedHat 5.2 modutils, which seem to have been compiled to check /lib/modules/preferred as well (and first, from the looks of things). The net effect of this change seems to be to make it practically impossible to use the old scheme where /lib/modules/preferred was symlinked to the right place. I believe this is undesirable; I don't want to be frobbing EXTRAVERSION in kernel Makefiles for every variant I test-compile (among other things, this will make patches from kernel version to kernel version fail to apply cleanly!). I suggest that RedHat revert/enhance/whatever modutils to check /lib/modules/preferred again.
You can modprobe modules only against the running kernel, and now we have a very sure way of identifying the running kernel, so the preferred hack is no longer needed.
If the preferred hack is no longer supposed to be there at all, you might want to delete the stanza in /etc/rc.d/rc.sysinit that falls back to it. Personally, I think that relying on uname -r/EXTRAVERSION is a bit fragile in an environment where people may build their own kernels, but clearly RedHat disagrees.
it has been removed in the latest initscripts (removed about 3/29 or so).
Relying on EXTRAVERSIOn is a whole lot more stable than the previous preffered hack. This is what EXTRAVERSION is for and it is not terribly difficult to change that value when compiling a customized kernel.