This is one of those topics that I searched Google for and read countless pages on and seemed like there was no answer for. Well, there is. Here is how I installed Mac OS 9 on my broken PowerBook G4 667Mhz DVI that has a broken CD drive. This is just what worked for me for the Macs I have. YMMV.
What you need:
-A Mac of some sort with USB running OS 9 already. Sorry, there is no way around this.
-A USB thumb drive. Mine was 8GB.
-Mac OS 9 iso image. I used the 9.2.2 Universal 2002 from MacintoshRepository.org
-A Mac OS 9 CD to make it easier
-Toast. I used 4.1.2 from MacintoshRepository.org
Okay, here you go.
1. Boot into the Mac running OS 9.
2. Load up the OS 9 CD or mount the OS 9 iso.
3. Connect USB thumb drive.
4. Using Drive Setup, initialize the USB thumb drive to Mac OS Extended.
5. Install OS 9 on the thumb drive as if it were a HDD.
6. Copy the OS 9 iso and Toast installer to the USB drive.
7. Unmount the USB drive and put it in the Mac you want to install OS 9 on to make sure it will boot OS 9 from the USB drive.
8. If all goes as planned, You will boot into OS 9 from the USB drive. This is the biggest hurdle.
9. Install Toast onto the USB drive. NOT THE HDD.
10. Use Toast to mount the OS 9 iso. I had to go to Utilities/Mount Image(or whatever it is. Something like that.)
11. There you go. Open up the mounted OS 9 install disk and install to the HDD.
12. Reboot when you're done and enjoy!