Creating A Local Yum Repository (CentOS) 

Author & Content of this howto, Tim Haselaars (http://www.trinix.be)

Sometimes it can be handy to set up your own repository to prevent from downloading the remote repository over and over again. This tutorial shows how to create a CentOS mirror for your local network. If you have to install multiple systems in your local network then all needed packages can be downloaded over the fast LAN connection, thus saving your internet bandwidth.

Create the Directories:

mkdir -pv /var/www/html/centos/4/{os,updates}/i386

Replacing 4 and i386 with your major version and architecture.
Additionally you'll need some deeper directories. This is the correct location to copy the CD/DVD rpms.

The Base Repository

Copy the RPMs from the CDs/DVD to /var/www/html/centos/base.

Create the base repository headers:

createrepo /var/www/html/centos/4/os/i386/

The Updates Repository

Select an rsync mirror for updates: check out this list of aviable mirrors: Centos OS Mirror list and these are identified with rsync.

For example: rsync://ftp.belnet.be/packages/centos/

The mirrors share a common structure for updates. Simply append /updates/<d version>/<base arch>.

Rsync to create the updates-released repository:

/usr/bin/rsync -avrt rsync://ftp.riken.jp/centos/4/updates/i386 --exclude=debug/ /var/www/html/centos/4/updates/

This will create a complete update repository at /var/www/html/centos/4/updates/i386. The repodata directory will be created with all of the headers.

You can additionally pipe this into mail to receive an email when updates are available.

Next I would advise to setup a cron job to run the rsync (above). In this manner your repository is kept updated and only new updates and headers will be downloaded to your repository.

Yum Configuration

Edit yum.conf:

vi /etc/yum.repos.d/CentOS-Base.repo

[base]
name=CentOS-$releasever - Base
baseurl=http://192.168.*.*/centos/$releasever/os/$basearch/
#mirrorlist=http://mirrorlist.centos.org/?release=$releasever&arch=$basearch&repo=os
#baseurl=http://mirror.centos.org/centos/$releasever/os/$basearch/
gpgcheck=1
gpgkey=http://mirror.centos.org/centos/RPM-GPG-KEY-CentOS-5
#released updates
[update]
name=CentOS-$releasever - Updates
baseurl=http://192.168.*.*/centos/$releasever/updates/$basearch/
#mirrorlist=http://mirrorlist.centos.org/?release=$releasever&arch=$basearch&repo=updates
#baseurl=http://mirror.centos.org/centos/$releasever/updates/$basearch/
gpgcheck=1
gpgkey=http://mirror.centos.org/centos/RPM-GPG-KEY-CentOS-5

That's it.

SPECIAL THANKS TO kylehase (for sending me corrections)