If you hold the Command and Option keys while clicking an icon in the dock, Jaguar will hide everything except the application you clicked; if you're in Explorer and Command-Option click the finder icon in the dock, everything else will be hidden (when you let up the Command and Option keys).
The "SH-2.05#" is what Jaguar displays at the end of a single-user boot where you type "/sbin/fsck -y" to run the file consistency check. (I forget what 10.1.5 displayed.) When you get the "SH-2.05#" just type "reboot" and hit Return.
Install suggestions:
First, double-check your Jaguar...