Here are some of my experiences setting up OS 9 on the G4 Mac mini. I bought a G4 mini a while ago, for this exact purpose

My machine is a Late 2005 model, 1.5 GHz, with SuperDrive, with Wi-Fi and Bluetooth. It came with 512MB of RAM (I recently upgraded this to 1GB), and a 120GB hard drive with OS X 10.5.8 installed (no original install discs though).
I went for a dual boot set-up, with separate drive partitions for OS 9 and OS X 10.4.
Booting from the OS 9 ISO unfortunately did not work. The boot sequence stalled at the Happy Mac stage, at which point the disc drive would make noises and spin up and down in an endless loop. I tried redownloading the ISO a few times (figuring that I might be suffering from
this issue), but I kept running into the same problem and I eventually gave up.
I ended up installing Mac OS X 10.4 first. Lacking the original OS install discs (10.4.2), I used a retail 10.4 disc. While trying to install OS X I ran into an issue with the DVI connection to my monitor, which I guess is related to
this. I got around this by switching to another monitor which had a VGA input, and connecting to that using a DVI to VGA adapter. (After installing Mac OS X, updating the software to 10.4.11 resolved the DVI issue, at least on the OS X side of things.)
I partitioned the hard drive for a dual boot set-up (from the Terminal, within the Mac OS X installer environment). The commands I used were (approximately):
diskutil list
diskutil partitionDisk /dev/disk1 2 OS9Drivers HFS+ MacHD 60G JHFS+ OSXHD 60G
After some trial and error, I managed to install OS 9 from within Mac OS X, using the drag and drop approach. (Basically, mount the Mac mini OS 9 CD, mount the "Configurations/Macintosh HD" image, copy everything inside onto the OS 9 partition, and copy the "CD Extras" folder as well.)
This was the command I needed to run to "bless" the OS 9 system folder, from within OS X:
sudo bless -folder9 "/Volumes/MacHD/System Folder" -use9 -bootBlockFile "/usr/share/misc/bootblockdata"
At this point, I could boot successfully into OS 9.
Regarding some of the "known issues":
- Mouse cursor freezing: I only experienced this once, so far.
- Audio volume: The volume is stuck at an impractically low level. I did end up buying an M-Audio Transit USB interface and using that as the audio output, this has resolved the issue for me, for now.
- OS X does not recognize OS 9 as a startup disk option. However, this is only a minor issue, because holding down the option key at startup works fine, and I can still set OS 9 as the default boot option from within OS 9 itself.
- The DVI connection issue is still unresolved for me on OS 9, so I am still using a VGA monitor as a workaround. (So far, these alternative drivers haven't worked for me; they cause the screen to turn black, after which nothing seems to happen.)
- Bluetooth: If I pair with a wireless keyboard from within Mac OS X, then the keyboard still works correctly within OS 9.
Aside from the above inconveniences, OS 9 runs quite flawlessly.
More recently, I replaced the hard drive with a 240GB mSATA SSD (using an
mSATA to IDE converter). As a result, the Mac mini now runs more quietly and feels faster and more responsive.