There are problems with the mkbootdisk program and the Compaq smart 2 array. The device entries for the Compaq smart 2 array are normally in: /dev/ida/c* however mkbootdisk creates the device entry on the floppy in /dev/ which causes LILO to fail silently during the install in the "create" rescue disk area, and visibly if you try to create a rescue floppy after the install.
fixed in latest mkbootdisk, IIRC.