Re: Fedora 16.1 kernel update vs nvidia-kmod
I do believe that the problem isn't installing the new kernel, but in removing the older kernel. Yum keeps 3 kernels installed by default, then starts removing the oldest when it updates the kernel. However in your situation, it appears that when it tries to remove the older kernel, it can't since the kmod-nvidia has a dependency on it.
Actually, looking closer, it appears you already removed the kernel that that particular nvidia kmod depends upon, but didn't remove the kmod nvidia, leaving you with a broken dependency.
Both issues have the same resolution, though.
You can try removing the kmod-nvidia version specified, then try updating your kernel.
yum remove kmod-nvidia-3.3.4-3*
yum update kernel