To boot Linux from MILO, you must use the boot command. The command differs slightly depending on what partition you used for your root partition. If you used the second partition on your first SCSI hard drive, you would boot as follows:
boot sda2:vmlinux.gz root=/dev/sda2
If you instead used the third partition on your second IDE drive, you would use this command:
boot hdb3:vmlinux.gz root=/dev/hdb3
For information on what these commands do and automating the boot process, read the MILO HOWTO in Appendix E.