I just successfully updated my Dell PowerEdge 1850 from CentOS 4.8 to CentOS 5.4, luckily the issues I faced were not so rare. The steps I used are listed below, may it helpful for you as well! Although this post is mainly intended for CentOS it should work on RHEL systems as well.
Before you start, A word of advice i believe most experienced RHEL/CentOS users will show you regarding what you’re thinking:
Upgrade between minor versions (i.e. CentOS 5.2 -> 5.3 -> 5.4, or even 5.0 -> 5.4) YES
Upgrade between major system versions (i.e. CentOS 4.8 to CentOS 5.4) NO » Read more: Update CentOS 4 to CentOS 5 remotely