If you try to establish an ISS (Inter Satellite Sync) between two RHN Satellites, do not fully trust the documentation. A slave Satellite must be named by a hostname (IP is not enough) and must have an A and a PTR DNS record or have an /etc/hosts entry. Check it before restarting the satellite by issuing rhn-satellite restart. The check is simply done by entering gethostip rhn.example.com and getent hosts <IP-address> on the commandline.
When Quoting the documentaion at Red Hats web site: http://www.redhat.com/docs/en-US/Red_Hat_Network_Satellite/5.3/Installation_Guide/html/s2-sync-iss-config-master.html: allowed_iss_slaves=rhn.example.com means: A hostname, not just an IP. It is not clearly stated what kind of quality such an entry needs to have.