Does installing 2960 work (on RH 8)? In other words, try to narrow down what's causing the problem -- is it the 3123 drivers, or is it RH 8? Changing more than one thing at a time is generally not a good way to test things...
Otherwise, go back to your 7.3 partition (you do still have that, right?) and install 3123, and see if that works.