OK, now it's making more sense. The XFree86.0.log file says that X is loading all the proper drivers and extensions, and that matches the config file. So that end of things is fine.
The problem now is that the kernel module (NVdriver) isn't being loaded. To fix it until you reboot, just do a modprobe NVdriver (as root) and try to start X again. Unfortunately, this only works until you shut down. You have to edit the /etc/modules.conf file to make it load automatically whenever it's needed.
Your distro is based on RH 7.1 you said, so I don't believe you're running devfs (although I could be wrong). To find out for sure, do a [ -c /dev/.devfsd ] ; echo $? -- if that prints out a 1, then you are not running devfs. If it prints out a 0, then you are.
If you are running devfs, then make sure a line looking like alias /dev/nvidia* NVdriver is in your /etc/modules.conf file. If it isn't there, add it.
If you are not running devfs, then the alias line should look like alias char-major-195 NVdriver instead.
From the looks of things, it's either the case that the wrong line got put into modules.conf by the driver, or that neither one got put in there by it. My guess is that neither line got put there, because I've had that happen a lot of times to me.
Your kernel version (2.4.2-2) looks fine. It's a little old (there's a 2.4.19 out now), but not old enough that it won't work.