I did almost the same thing wiht RedHat 7.3 and it took me quite a few days to figure out all the bugs.
In the /etc/dhcpd.conf there is no need for the group declaration if all machines can use dynamic IP. The only problem with that is when the client tries to resolve hostname and domain name. It does that 2 times and if it cannot, it fail the installation. To resolve I put in the TFTP/DHCP/NFS server in /etc/hosts the name and IP address of all the nodes the DHCP server can give i.e [192.168.0.125 pc-00125] [192.168.0.126 pc-00126] ... all through the range of IP addresses of the dhcpd.conf.
I want to do the same thing with e-smith 6.3b. But I have a problem with the post install.
Using PXE, the client server boots well, gets the initrd & vmlinuz files ok, gets the install.cfg file ok, then you see the installation of a pure RedHat server installation. Everything goes well, you see the RedHats packages along with the ones from e-smith.
The problem is at the end of the installation, in the post-install. It complains about errors in anaconda etc...
I will try your example to see if it will fix the anaconda problem.
I am happy to find that I am not alone with those problems. I am in the same boat as you: VIA Mini-Itx with a second NIC in the PCI riser, no CD and no Floppy.
Michel-Andre
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Beat me, whip me, make me use Windows...