The 1.42 iBooks like the one I'm typing on right now aren't really the greatest choices for a Mac OS 9 machine, due to the Radeon 9550 graphics leaving you with zero 3D acceleration. However, I will say that the boot picker doesn't seem to work right on newer Macs; probably around 2003 or so it started getting issues. Booting from Open Firmware would be your only choice, but if you haven't got that to work either, I can't really think of anything else you could do besides maybe netboot.
http://macos9lives.com/smforum/index.php?topic=2225.0Or possibly making a ~650MB partition for the install media? Still, you won't have drivers for graphics, AirPort Extreme, or any of the like if you do install it.