Recompile the kernel with the "Filesystem" options:
CONFIG_DEVFS_FS=y
CONFIG_DEVFS_MOUNT=y
At this point, it's safe to reboot, even if everything is totally screwed up.
That's because devfs won't actually be mounted without a kernel argument
telling the kernel to mount devfs.
In lilo.conf, use append to pass "devfs=mount" to the kernel.
Here is what my entry looks like: