Here you have the instructions:
1) Install anaconda and anaconda-runtime rpms if you don't have them.
2) Copy e-smith in ~/cd1
3) chmod u+w~ /cd1/RedHat/base/hdlist
4) chmod u+w ~/cd1/RedHat/base/comps
5) REPLACE every rpm that you want to update, for example Apache
6) IF you want to ADD a package copy it in ~/cd1/RedHat/RPMS/
7)IF you have added some package, edit ~/cd1/RedHat/comps and add it's name in Customized Packages (or whatever you like best)

/usr/lib/anaconda-runtime/genhdlist --withnumbers --hdlist ~/cd1/RedHat/base/hdlist ~/cd1
9) cp ~/cd1/images/cdboot.img ~/images
10) mkisofs -V esmith -b ~/images/cdboot.img -c ~/boot.cat -r -T -o cd1.iso ~/cd1
Thats it, bur and enjoy