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It is not always possible to boot a computer from the hard disk. For example, if you make a mistake in configuring LILO, you might make your system unbootable. For these situations, you need an alternative way of booting that will always work (as long as the hardware works). For typical PCs, this means booting from the floppy drive.
Most Linux distributions allow one to create an emergency boot floppy during installation. It is a good idea to do this. However, some such boot disks contain only the kernel, and assume you will be using the programs on the distribution's installation disks to fix whatever problem you have. Sometimes those programs aren't enough; for example, you might have to restore some files from backups made with software not on the installation disks.
Thus, it might be necessary to create a custom root floppy as well. The Bootdisk HOWTO by Graham Chapman (XXX citation) contains instructions for doing this. You must, of course, remember to keep your emergency boot and root floppies up to date.
You can't use the floppy drive you use to mount the root floppy for anything else. This can be inconvenient if you only have one floppy drive. However, if you have enough memory, you can configure your boot floppy to load the root disk to a ramdisk (the boot floppy's kernel needs to be specially configured for this). Once the root floppy has been loaded into the ramdisk, the floppy drive is free to mount other disks.