OK, well I'm not sure exactly what made it work, but here's what I did anyway: (If anybody can give a more concise explanation on how to do this or why some things didn't work it would be appreciated. There's an old article at
www.macosx.org/nocd that talks about doing something like this, but OS 9 wouldn't recognize the disk image I had downloaded so I couldn't do it that way). I did this on a 450DP with 10.0.4. The partition I used was actually on a different physical hard drive, but I don't think that should matter.
1. I tried to just erase one of my partitions and copy the files straight over from the mounted image. BUT the finder gave me weird errors about overwriting files -- for some reason it thought a couple files like "ttys" and "ttys.installer" (I don't remember the names for sure) were the same files.
2. So, I logged in as root to make sure there weren't any permission issues going on and I tried to find which files were generating errors and get them copied over correctly. I also had hidden files showing (courtesy of Tinkertool (see versiontracker.com)). I was sure I had it all correct, and the partition was showing up in 'Startup Disk' so I restarted. Looked good, even threw up the initial OS X banner but then crashed to a command line & I had to restart (and hold down the option key to choose my 10.0.4 OS X startup disk instead)
3. Back in 10.0.4 again I logged in as root, mounted the image and started up Terminal. I did this:
cp -R /volumes/"Mac OS X Install CD"/* /volumes/mypartition/
Since I was root it got everything. Strangely, through terminal I could see (and copy) some file called "Norton FS Index" that I couldn't see through the finder, even with hidden files shown. I'm wondering if that was the problem before. Anyway, there were a couple directories & files thrown on "mypartition" after I did this that weren't on the Install CD disk image, so I deleted them from mypartition. I opened system settings and 'startup disk' was showing mypartition as an option once again. (I actually renamed it "Mac OS X Install CD" after unmounting the disk image, but I don't know if that really matters) I selected mypartition and restarted. Voila! A faster-than-CD seamless install ensued.
Well that's it. Sorry this was so long -- since I don't know for sure what I did right I thought should give some details.
Any questions post again & I'll check back or e-mail me.