An important principle of kernel configuration is TANSTAAFL (There Ain't No Such Thing As A Free Lunch). Any features you add to the kernel increase its size (and the time to build it), even if you choose to add them as modules.
To make their kernels useable by most people on most hardware, Linux distributors generally include support for most hardware and functions. Debian is no different; pre-compiled kernels include support for hardware you'll never have and languages you'll never read. My general rule for kernel configuration is, "If in doubt leave it out." If you test your new kernel and find that some of your hardware doesn't work, it's easy to tweak the configuration and build another kernel.
Kernel size depends on configuration. My kernel 2.4.18 was 645 KB; the kernel I built using Debian's 2.4.18-bf2.4 configuration was 1228 KB.
Apart from larger and larger sizes, another feature of recent kernel images is their use of initrd. A special dictionary I keep next to my computer defines initrd as "one more thing to worry about". You can avoid the need to worry about initrd by ensuring that you compile directly into the kernel (not as modules) support for your boot hardware and root filesystem. If the hard drive you boot from is IDE, compile IDE support into the kernel. If your root filesystem is Reiserfs be sure Reiserfs support is built not as modules but directly into the kernel.
Be sure (!) that you build floppy disk support into the kernel. If you compile it as modules you won't be able to boot with your new kernel from a floppy disk.
Unfortunately a detailed explanation of kernel options is well beyond the scope of this document. To find out more about configuring the kernel, please see The Linux Documentation Project's "Kernel-HOWTO", the files in /usr/src/linux/Documentation, and your hardware documentation. Search the archives of the debian-user mailing list, and ask questions there if you don't find answers in the archives. Remember that "Google is your friend."
There are several ways to configure the kernel. The first one we will cover is called "xconfig". Once you've changed to the /usr/src/linux directory, start it like this:
bash:/usr/src/linux$ make xconfig
Notice that the "IEEE 1394 ..." and "Bluetooth support" buttons are greyed out. They are not available because they depend on another option which has not been enabled. Click on "Code maturity level options" and change "Prompt for development and/or incomplete code/drivers" to "y". Now click the "Main menu" button, and notice how the IEEE and Bluetooth buttons can be selected just like the others. Anywhere you see an option that's greyed out, it depends on another option that has been disabled somewhere else.
Perhaps you aren't using X. Perhaps you're getting better at this configuration business, and your trusty keyboard is faster than a mouse. (Maybe your cat is a little too efficient.) Menuconfig may be just the tool for you.
bash:/usr/src/linux$ make menuconfig
If you start menuconfig in a longer terminal window, you'll be able to see more categories without scrolling. Menuconfig opens to the size of the terminal you start it from.
The options are the same as you'd see in xconfig, with one crucial difference -- there's no way to "grey out" an option in menuconfig. If you don't select "Prompt for development or incomplete code/drivers", you won't even see the options for Firewire or Bluetooth.
For this reason many of us encourage kernel newbies to use xconfig, and try menuconfig later when they're more familiar with kernel configuration.
Kernel 0.01 had no configuration at all, because there were no options. Kernel 1.0 had 49 different options, so a configuration mechanism was needed. Enter "make config".
Now exit "make config". You don't want to answer as many as ~1300 different questions one at a time, and there's very little chance you'd get a configuration you could live with anyway. Much better is to use either xconfig or menuconfig.