Disabling IPv6 does help (I was able to boot with the 2.6.15-26-k7
kernel and use the internet with DNS working), but when I did an
'ifconfig eth0 down' followed by an 'ifconfig eth0 up' (or
/etc/init.d/networking stop followed by /etc/init.d/networking start)
again I can access the internet via IP Addresses, but have no DNS, and
am unable to obtain an IP via DHCP.

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DHCP and DNS do not function on eth0 with kernel 2.6.15-26-k7 - works fine with 
2.6.15-25-k7
https://launchpad.net/bugs/54513

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