This article is from the Frequently Asked Questions for Linux, the Free/Open Source UNIX-like operating system kernel that runs on many modern computer systems. Maintained by David C. Merrill with numerous contributions by others. (v1.0).
A: From kernel versions 1.1.80 on, the compressed kernel image, which is what LILO needs to find, is in arch/i386/boot/zImage, or arch/i386/boot/bzImage when it is built, and is normally stored in the /boot/ directory. The /etc/ lilo.conf file should refer to the vmlinuz symbolic link, not the actual kernel image.
This was changed to make it easier to build kernel versions for several different processors from one source tree.