Looks like part of your question didn't come through. I'm not sure if Suse 10 started with a 2.4 kernel. If it did, I think I know what part of the problem. There were major subsystem changes in the /dev/ subsystem. Direct upgrades from 2.4 to 2.6 kernels can be problematic unless you take some precautions.
Question 2: How can I add this device to PhoenixBIOS so I can boot from it--the device doesn't show up at all. I'm going to need to be able to boot from the external drive to do any upgrades or patches.
It really depends upon whether or not the BIOS supports the option to boot from USB. Many older motherboards don't support this. We have several laptops here and only a couple even have this option. If you check the boot order, where you can change if you want the hard disk, cdrom, or floppy to boot first, is there an option for booting USB? If not, you're probably out of luck on that option.
You might take a look at this page:
http://thomer.com/linux/migrate-to-2.6.html and look at the section about USB. The page is specific to RedHat, but the section about USB should apply.
If you give a little more info about your upgrade, it would probably facilitate us helping out.
Suse 10 ships with 2.6.13-15 default.
The only distro that I've known that still ships with a 2.4 by default is Slackware.
Up until now, I've never had a problem updating kernels. I learned how to do this on Slackware--I got a 2.6 kernel (other than the one provided) to run. I ran a similar process when I had Suse 9.3 (though the process was a little easier IMO). Still no problems--everything still functioned.
Of course, as for the fried drive, it just died suddenly. The kernel upgrade had nothing to do with the drive--other than not being able to read it--if it worked.
The machine isn't even two years old--though it's an emachines desktop that my folks originally got a deal on.
I'll have to check BIOS when I log off tonight (which will be in a little bit)