Hello, I need some help.
I installed Fedora Core 4, then Windows98. To make FC bootable, I started linux from CD in rescue mode, and issued the commands:
chroot /mnt/sysimage
grub-install /dev/sda
After that all worked fine. I could choose which system to boot. Then I shrinked one of my vfat partitions uing PartitionMagic 8 in the W98 environment. Next reset caused the following message: "Grub loading, please wait... Error 17 /boot/grub/stage1.5". I restarted my PC from the linux instalation CD using rescue mode and issued once again commands as above, but I got the maesaage "The file /boot/grub/stage1 not read correctly". I have the following partitions on my HD (data from disk druid):
start end
/dev/sda1 vfat 1 250
free 251 6527
/dev/sda2 extended 6528 19456
free 6528 11770 created after shrinking
/dev/sda5 vfat 11771 13054 this was shrinked
/dev/sda6 ext 13055 13067 boot partition, probably
/dev/sda7 LVMPV 13068 19456
free 19457 19457
Updating the linux instalation didn't work, either. I got the message:"No kernel package were installed...your boot loader configuration will not be changed". What has happend? Could anybody help me, please?

The simple answer is that you can't manipulate parititons that are already set, by leaving free space between partitions. This changes the way the logical layout of the partitions, how the sectors are allocated and confuses grub. And in the process, you probably corrupted partiton /dev/sda6, which holds the grub reference files, unreadable.

You can leave empty space at the end of drives, not between partitions. You should never manipulate partitions like once any OS is installed, unless you really know what you are doing. The order of partitions should be laid out before installing any OS and not touched afterwards. You can, however, add partitions on the free space afterwards, but realize that if you add primary partitions, then this also changes the logical order of partitions.

Did you make rescue boot disks of PartitionMagic to attempt a recovery? This is the reason why PM asks you to do this, to avoid any disaster and recover if you made a mistake.