SSIA - grub-0.5.97-3.20010625 worked (so the config is ok); I updated to 0.90-1 and re-ran grub-install. Result: grub claims it's loading stage1.5, then the screen turns black and 2 seconds later, the system reboots. Going back to 0.5.97-3.20010625 fixes the problem.
Might be some interoperability issue with my BIOS; this was on a dell latitude c800 (BIOS rev A12) using an ati rage 128 VGA chipset (just in case it's caused by the vga16 mode...).
Although the vga16 stuff hasn't changed (and TBH, not all that much has changed since the earlier cvs snapshot), could you try commenting out the splashimage line in grub.conf and see if it still hangs with 0.90?
Happens without vga16 as well, and still happens with 0.90-7. 0.57.97-3.20010625 was the last version that worked.
Is there a newer BIOS for the c800? There are too many people around here with c800/inspiron 8000s that I'd expect to have heard more if they just didn't work in general.
Closing due to lack of activity.