If you need to run lilo in a chroot (say, after booting from a rescue disk), don't forget to mount /proc and /dev in the chroot environment.
For example, if the partition of your normal root is /dev/sda1 then
If you don't do this for the /dev directory, lilo won't fix the correct MBR. Lilo also needs the /proc dummy filesystem otherwise it spits out some warning messages that you can probably do without; it probably uses /proc/devices.
(The reason for this post will be explained in the next couple of days when I follow up with details of a long tedious two days spent fixing up my Slackware upgrade, where I forgot to create an initrd before rebooting with a new kernel.)