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Yes, you can. No, it does not :)
The oracle-validated RPM package allows you to set up a local repository with the right stuff in it. The note 579101.1 is careful to include references to Red Hat Network (RHN) as appropriate, it just does not provide direct instructions for it.
You build your own local OEL/RHEL repository, install oracle-validated, import the signing key for the repository RPM packages and off you go.
To summarise: yes, you can use the oracle-validated rpm on RHEL 4 and 5.
The use of the oracle-validated rpm is not only to have some things arranged on the linux level (limits, user, groups, etc.) but also to have all the needed other rpm's installed. These rpm's are not installed when the oracle-validated rpm is installed using the rpm command, instead, the installation will fail and notify you about the first rpm on which the oracle-validated package is depended (and when resolved about the second, etc.). up2date & yum resolves these dependencies automagically for you, using rpm you must do it yourself. That's why it is convenient to have up2date setup, or a yum repositiry.