Make sure the dmg is read only before restore, and the USB is GUID. Also, you can restore it to a 10GB partition which probably has a better chance of working.
Thanks for the responses, to you and all, I feel slightly less lonely!
Well, perhaps I should summarize what I've tried so far?
Under os 10.4Weeded-out but took note of USB booting and installing guides that were either PPC or much too recent as far as OSX versions go..
Basic gist was format the USB flash drive in GUID. I've used 3 different ones!
Did the single partition but also tried multi-partition. All HFS/HFS+ (journaled?)
Used Disk Utility for all of this as was described. Used the restore option to create a bootable install partition.
As source image, I used DMG as well as ISO that created it (I believe at least one source said this was acceptable!). They all created an end product that at least
looked the same.
As my main install disc that came with the MacBook is apparently damaged beyond readable, I was using 3 different images, mostly from MacGarden. 10.5 to be exact.
Also was using the Firewire and created a similar partition on that. I've tried multiple formats with different images and none of them want to show up or work as an installer. They do show up in the Start Disk utility as OSX 10.5.x but that's as far as that goes.
It looks so damn simple in all the illustrations but all to no effect. I have spent hours trying different approaches. I can't quite grasp what I am doing wrong!
This video confuses me even more!
---->> https://www.youtube.com/watch?v=DN4z_1z4j6MSo the flash drive is GUID, but the install partition is Apple Partition?!?
Mind you he's talking about Lion I believe.
I can honestly say that the "micro" differences between some of these OS versions and the hardware and file systems get confusing!
Especially it seems in that transition period between PPC/Intel, it looks like a mish mash.