depends on what you mean by recompiling the kernel..
as much as i know the windows 9x kernel (95,98,98SE) is "compiled"(not in the way you compiled the *nix ones) at system install, there are a couple of parts:
1)kernel32.dll -32bit part ring3
2)krnl386.exe -16bit part (leftover from olde win31,but it still contain some essential components for the system)
3)vmm32.vxd - ring0 kernel , boots up in DOS/real mode to ring0 and loads a multitude of device drivers and OS components..
kernel32.dll and krnl386.exe were compiled by Microsoft at distro time(IN case you didnt know windows IS NOT open source ),so there isnt any public source for those,however if you are really curious how they work , you can disassemble(use IDA Pro) them yourself and analyze, they were written in asm+c.. There is also a great book on the subject that covers analyzing/disassembling the 95 kernel : "Matt Pietrek" Windows 95 System Programming Secrets .. there is a pdf of it if floating around you search a bit ;)
Now back to the "recompilation process".. the ring0 part is actually runtime generated, a stub is present in the 9x installer (of vmm32.vxd) , and there are about ~20 vxds which make the core of the OS, those vxd's are somewhat small and are all written in asm... at setup time, the installer picks up the vxd's your system needs and merges them into vmm32.vxd , you can re-do this process by making a wininit.ini file and placing it in your windir that has a contents similar to :
http://privatepaste.com/751tSJUDIo
Overall reversing and hacking 9x is quite fun,for example i managed to cook up a 4mb version of win98se(i used some 95 components though),it was quite fun and loaded in about 2 seconds..
(Sidenote: source code for the 2k/xpsp1 kernel was leaked and DOS source is also available,i havent heard of anyone recompiling the leaked kernel,but it might be possible to do it)
Have Phun