I've posted to Fedora Forums and logged a Red Hat bug, but since that's not going too well, I'll just blog it to relieve stress...

New install of Fedora Core 3 final build from DVD iso to Dell 8600 Inspiron laptop with Windows XP SP2 on hda2 and 12.5 MB free space. First time Linux has touched this machine.

Configured Windows as default OS during FC3 install and set boot password option for grub. FC3 installed to the free space with: 1GB Swap, 4.5 GB /, 2GB /opt, 2GB /home, 2GB /usr/local. No problems.