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On my Kalyway 10.5.2, they are located on the root of the filesystem. Just beside the default mach_kernel binary. Look for files containing the word "kernel" in their name. The one I am using now is named "modbinkernel", which is a 9.2.2 kernel with AMD support.
I am a newbee, so apologies if my answer is not correct. But since I have tried this myself, I think this is the correct answer to your first question: You can test a new kernel by typing the kernel's name on the darwin boot menu, just before the system starts loading kexts. For example, you can type "modbinkernel". Once you have fully tested a new kernel, you cat set it to be the default one by editing the /Library/Preferences/SystemConfiguration/com.apple.Boot.plist file and putting the new kernel's name instead of the default matck_kernel.