Adding to track anaconda changes resulting from 435358 initscript iscsi bug.
Fixed in anaconda-11.1.2.105-1 .
VERIFIED in RHEL5.2 Beta
An advisory has been issued which should help the problem described in this bug report. This report is therefore being closed with a resolution of ERRATA. For more information on the solution and/or where to find the updated files, please follow the link below. You may reopen this bug report if the solution does not work for you. http://rhn.redhat.com/errata/RHBA-2008-0397.html
We still seem to have some problems here; have a report of similar problems affecting systems with a separate /var over iSCSI. I'm waiting for confirmation on some details right now (whether this was hand-configured or via anaconda). Will open a new BZ once I get that information.