This is the machine architecture. It must be either alpha, amd64, i386, ia64, pc98, powerpc, or sparc64.
cpu I486_CPU
cpu I586_CPU
cpu I686_CPU
The above option specifies the type of CPU you have in your system. You may have multiple instances of the CPU line (if, for example, you are not sure whether you should use I586_CPU or I686_CPU), but for a custom kernel it is best to specify only the CPU you have. If you are unsure of your CPU type, you can check the /var/run/dmesg.boot file to view your boot messages.