The parameter is currently documented as method=hd://<dev>/<path> This is not correct. The correct usage would be equal to the ks=hd format and should read method=hd:<device>:<path>
thanks Stefan. bug noted as part of: http://www.redhat.com/docs/manuals/enterprise/RHEL-5-manual/Installation_Guide-en-US/s1-kickstart2-startinginstall.html will update soon.
setting as MODIFIED; corrected in all source trees.
verified: http://www.redhat.com/docs/manuals/enterprise/RHEL-5-manual/Installation_Guide-en-US/s1-kickstart2-startinginstall.html