I actually did this, back then, a few times (I was a pipping teen in the day). It was enormously fun; absolutely loved it; all on a 486-dx(2?)
Recompiling the kernel manually was something you just did; it was expected. Downloading a bunch of source code and compiling the dependencies and managing everything yourself; also completely ordinary.
The best thing was going between Pillbox, Yggdrasil, Mandrake, Slackware(!) ... those were the days!
There were two floppy disks that you would boot from, the `Boot` and the `Root` if I remember right. If you had a system up and running you could use dd, otherwise there was a DOS tool that would do as much. Interestingly, this was when the first thing you'd see at boot was
LILO
The LILO above was actually a complex diagnostic result. Getting something like
LILILILILILILILI
was possible
or
LIL
They all meant a bunch of different things. If you got the full LILO you would be like "phew, it worked". Otherwise, you use your rescue floppy (or the one you used to install, had to remember to keep those around) and figure out what was wrong.
CDs originally weren't bootable and lots of BIOSES didn't know how to deal with them. There was a standard that went out called the "El Torito" or something that basically talked about how CDROMS would be bootable. I think Windows 98 had this; in fact, I think it came out of Redmond (but I haven't done my homework in the Goog)
So in 199x, even if you had a fancy bootable CD, you were still making floppy images, then inserting the CD when instructed to. In fact, I still have a box of floppies just in case I need to deal with hardware pre-1999 ... which is becoming less and less relevant (I think I used one last in 2006). Then again, I used a 5 1/4 in 2003 ... so I guess it's worth keeping around another 4-6 years.
The worst memory I have is when I found out just how bad swap could be. I had to compile the NetBSD kernel on a laptop I had (IBM 360C, active color 640x480 display, NiCd battery, 2.88MB floppy, SCSI disk, huge docking station with speakers ... this is about 1999 (more of 1999 below)) and it had all of 8MB of RAM. I had to recompile the kernel to make use of an early wireless (which felt like pure magic) PCCARD I had (mind you, 16 bit, not 32-bit CardBus) and the kernel took 4.5 days(!) to compile. In fact, I remember starting it Christmas eve before eating dinner and it went on through Christmas day and then a few days after that.
I had mastered screen by this time so I was able to see that the machine was really chugging away. The reason was that the compiler used up all of my RAM and was hitting swap. After that I upgraded the machine and the new compilation took 40 minutes.
40 minutes then, seemed like getting DSL for the first time and then clicking on that 10MB file and thinking "What is going on here? A whole megabyte downloaded right in front of my eyes? In mere seconds?! I am never going outside again".
I long for these exciting days. The mobile world has it, that's about it.
More about 1999;
Speaking of 1999, two other big things, the BeOS 5 Demo, booted from windows and was awesome, then there was the "Bootable Floppy Challenge" which was done by QNX ... it was quite impressive in the day.