Most modern operating systems these days have a kernel - even Windows. Think of it as the core of the OS, and it provides much of the low level functionality (such as device drivers) that is made available to applications and higher-level parts of the operating system.

When "flashing the operating system" using an image (ie. the 100Mb+ download available from Nokia) you are actually flashing the device with several different filesystems and components - initfs, rootfs, kernel, a secondary boot loader etc. The large image you download from Nokia (called a FIASCO image) simply contains all of these components and will update all of them for you automatically. rootfs, by the way, is the filesystem that contains all your applications etc. - flash a new rootfs on to your device and you'll lose all your previously installed applications.

The Linux flasher allows you to flash these components individually by specifying the correct command line arguments. This functionality is NOT available on Windows XP, so if you only have a Windows PC then download and use a Linux LiveCD or obtain a VMWare image.

To flash only the kernel you would download the kernel binary (which isn't very big at 1.3MBMb) and flash it on to the device as follows:
-k instructs the flasher app to expect only the kernel as input
-f instructs the flasher app to flash whatever is used as input onto the device
-R instructs the flasher app to reboot the device when flashing is complete

Having reflashed your device with this new kernel, your device will restart exactly as before - all applications intact - but now your device will have high-speed SDHC support.

Hope this helps.