How long does it hang? CentOS 5.x takes much longer to get to the point where it is installing packages than 4.x, probably a good 3-4 minutes more, perhaps longer if your mirror is over a WAN connection, my mirror is on the local LAN and it does take a long time as well though it always has(CentOS 5.0,5.1,5.2, haven't tried 5.3).
I waited overnight and it was still hung in the morning. My local mirror is on the LAN, so it's not a network issue.
I was able to find another system, and it appeared to hang at the same spot (that is, I was looking at alternate console #3 and saw that it stopped at the same RPM). However, after a couple of minutes it proceeded. My guess is that this RPM is the last one to download, and the kickstart process needs to "think" about the next step. While it was stuck at this step, anaconda was using close to 100% of the CPU according to top in console 2.
So it appears to be a resource problem on the smaller desktops. The specs are Pentium 4 @ 3.00GHz with 1.5GB of memory and integrated Intel 915G/915GV/910GL accelerated VGA graphics. This should be more than enough to install/run CentOS. I even tried installing in text mode and it also hung. Very strange...
Alfred