diff -ur yum-3.2.28.orig/cli.py yum-3.2.28/cli.py
--- yum-3.2.28.orig/cli.py	2010-07-07 14:46:08.000000000 -0400
+++ yum-3.2.28/cli.py	2010-10-18 14:05:51.919642477 -0400
@@ -1409,13 +1409,15 @@
     def getRoot(self,opts):
         # If the conf file is inside the  installroot - use that.
         # otherwise look for it in the normal root
+        if opts.conffile is None:
+            opts.conffile = '/etc/yum/yum.conf'
+            if opts.installroot:
+                if os.access(opts.installroot+opts.conffile, os.R_OK):
+                    opts.conffile = opts.installroot+opts.conffile
+                elif os.access(opts.installroot+'/etc/yum.conf', os.R_OK):
+                    opts.conffile = opts.installroot+'/etc/yum.conf'
+
         if opts.installroot:
-            if os.access(opts.installroot+'/'+opts.conffile, os.R_OK):
-                opts.conffile = opts.installroot+'/'+opts.conffile
-            elif opts.conffile == '/etc/yum/yum.conf':
-                # check if /installroot/etc/yum.conf exists.
-                if os.access(opts.installroot+'/etc/yum.conf', os.R_OK):
-                    opts.conffile = opts.installroot+'/etc/yum.conf'         
             root=opts.installroot
         else:
             root = '/'
@@ -1456,7 +1458,7 @@
                 action="store_true",
                 help=_("run entirely from system cache, don't update cache"))
         group.add_option("-c", "--config", dest="conffile",
-                default='/etc/yum/yum.conf',
+                default=None,
                 help=_("config file location"), metavar='[config file]')
         group.add_option("-R", "--randomwait", dest="sleeptime", type='int',
                 default=None,
diff -ur yum-3.2.28.orig/yum/config.py yum-3.2.28/yum/config.py
--- yum-3.2.28.orig/yum/config.py	2010-10-18 13:59:40.165820228 -0400
+++ yum-3.2.28/yum/config.py	2010-10-18 14:05:51.919642477 -0400
@@ -623,7 +623,27 @@
     syslog_facility = Option('LOG_USER')
     syslog_device = Option('/dev/log')
     persistdir = Option('/var/lib/yum')
-    
+
+    def getRootedPath(self, path, enforce_default=False, defaults_to_host=False):
+        instroot = self.installroot
+        if instroot is None:
+            return path
+
+        if   path.startswith('hostfs://'):   res = path[9:]
+        elif path.startswith('chrootfs://'): res = instroot + '/' + path[11:]
+        else:
+            tmp = instroot + '/' + path
+
+            if enforce_default:
+                if defaults_to_host:    res = path
+                else:                   res = tmp
+            else:
+                if os.path.exists(tmp): res = tmp
+                elif defaults_to_host:  res = path
+                else:                   res = tmp
+
+        return res
+ 
 class YumConf(StartupConf):
     '''
     Configuration option definitions for yum.conf\'s [main] section.
@@ -637,6 +657,7 @@
 
     keepcache = BoolOption(True)
     logfile = Option('/var/log/yum.log')
+    lockfile = Option('/var/run/yum.pid')
     reposdir = ListOption(['/etc/yum/repos.d', '/etc/yum.repos.d'])
 
     commands = ListOption()
@@ -888,7 +909,7 @@
     # Apply the installroot to directory options
     def _apply_installroot(yumconf, option):
         path = getattr(yumconf, option)
-        ir_path = yumconf.installroot + path
+        ir_path = yumconf.getRootedPath(path)
         ir_path = ir_path.replace('//', '/') # os.path.normpath won't fix this and
                                              # it annoys me
         ir_path = varReplace(ir_path, yumvars)
@@ -912,7 +933,7 @@
         yumvars[fsvar] = val
 
     # These can use the above FS yumvars
-    for option in ('cachedir', 'logfile', 'persistdir'):
+    for option in ('cachedir', 'logfile', 'lockfile', 'persistdir'):
         _apply_installroot(yumconf, option)
 
     # Add in some extra attributes which aren't actually configuration values 
diff -ur yum-3.2.28.orig/yum/__init__.py yum-3.2.28/yum/__init__.py
--- yum-3.2.28.orig/yum/__init__.py	2010-10-18 13:59:40.173818661 -0400
+++ yum-3.2.28/yum/__init__.py	2010-10-18 14:05:51.920642052 -0400
@@ -429,8 +429,7 @@
             # this check makes sure that our dirs exist properly.
             # if they aren't in the installroot then don't prepend the installroot path
             # if we don't do this then anaconda likes to not  work.
-            if os.path.exists(self.conf.installroot+'/'+reposdir):
-                reposdir = self.conf.installroot + '/' + reposdir
+            reposdir = self.conf.getRootedPath(reposdir)            
 
             if os.path.isdir(reposdir):
                 for repofn in sorted(glob.glob('%s/*.repo' % reposdir)):
@@ -1585,10 +1584,8 @@
         if self.conf.uid != 0:
             return
             
-        root = self.conf.installroot
-        lockfile = root + '/' + lockfile # lock in the chroot
-        lockfile = os.path.normpath(lockfile) # get rid of silly preceding extra /
-        
+        lockfile = self.conf.lockfile
+ 
         mypid=str(os.getpid())    
         while not self._lock(lockfile, mypid, 0644):
             try: