1. ETH=$1
2. LATENCY=$2
3. LOSS=$3
4. JITTER=$4
5. BW=$5
6. sudo /sbin/tc qdisc del dev eth0 root
7. sudo /sbin/tc qdisc add dev eth0 root handle 1: netem delay $LATENCY
The problem is with missing kernel modules and/or kernel support. Make sure you can run
modprobe sch_netem
I also had to rebuild the kernel after I enabled because there's something built-in that is enabled after you enable network emulation.
See also http://forums.fedoraforum.org/showthread.php?t=285408 and http://www.linuxfoundation.org/collaborate/workgroups/networking/netem