Can't Install on Network Drive


I recently installed Mac OS X on my B&W 450/192.
I was suprised because I have a Sonnet ata/66 card and I didn't have to update it. But I have a couple questions about my new experience.

One: When trying to install anything, I always get a 'Cannot install on "/" because it is a network drive.." File sharing is off, remote access is off...Im connected through a DSL modem on a LAN from a 6500/250 that runs IPNetRouter. So im kind of shaken by that.

Two: Whenever I am downloading a file in IE, the system comes to a CRAWL...the download sucks all the cpu and it takes 20-30 seconds to open a window. Is there something I did wrong?

I did format the drive in Unix, because I didnt want to see it when I booted off 9.1. Also, I installed OS X on one drive, and have 9.1 on another drive. There is no 9.1 system on the OSX drive (obviously if its formatted for Unix). So would that be the reason I get a 'This system does not work on this type of Macintosh" when I try to startup classic?

Thanks for all the help.