Configure channel problem

[Russbucket]

SUSE10.0, smart-0.42-11.guru.suse100
smart-gui-0.42-11.guru.suse100
smart-ksmarttray-0.42-11.guru.suse100
smart-addons-0.42-11.guru.suse100
smart-debuginfo-0.42-11.guru.suse100

The package appears to work good except when I try to add a local repository. 
I put the RPM I downloaded in /usr/src/packages/RPMS/i386. did a createrepo 
at the RPMS level. All done as root.

Then go to smart /edit/channels/new and select either Read channel description 
from local path or Detect channel in local path. Browse 
to /usr/src/packages/RPMS and click add. The channel never shows up in the 
view of the channels and smart does not see the rpm. 

Documentation does not show how to add channel manually. All other examples 
work. Is this a bug or am I doing something wrong? Any help would be greatly 
appreciated. 

Thank you!
-- 
Russ