I seem to have solved the problem - but I'm not sure I believe the solution. Figured I would post it just for the record.
The day after I loaded Fedora 8 (and it was giving me all this grief) the system started screaming like a 747 on takeoff - one of the fans in the case appears to be breaking... I shut the machine down. This afternoon I pulled out the fan and popped in a new one.
Rebooted the machine - the network card came up 'inactive'. I used the network gui tool and hit the 'activate' button. Loaded my static IP address and has been running fine since....
I successfully did a 'yum update' and rebooted with the updated kernel. Same thing - the network card does not come up on boot - I think it should according to the config files. But as soon as I start it, the system appears to be working properly.
Who knew fans had so much control over the system