After grabbing the latest boot (boot-RHEA-1999:044.img) and update (updates-RHEA-1999:045.img) images from the support/errata page, the upgrade hangs at the /sbin/loader stage after typing "linux updates" (or "text updates") at the boot prompt. Could only upgrade after omitting the "updates" keyword at the boot prompt. Also, it reported that 720MBs of files was to be installed yet it filled my 1GB / partition, and the upgrade went really slowly (1hr30mins)! (ps the new grapical installer is well cool)
The hang that you are seeing at /sbin/loader is a result of a race condition when the cdrom is in the drive. Removing the cdrom from the drive and inserting it when prompted is the workaround at this point. However, seeing as you were able to upgrade without specifying the "updates" boot parameter, you did not require the updates so it is a moot point :-) As for filling up the 1G drive, the thing here is that there are still files from your 5.2 installation floating around, as well as backed up files (stuff like config files that RPM determines might be useful to keep around.) Thanks for the feedback.