I am currently trying to do a erase and install with my OS X system. I currently am using OS X 10.2.4 and want to erase and reinstall with the OS X 10.2 disk to clean out my drives. Every time I try to boot (holding the "c" while starting) from the disk, the system will not give me the option to reinstall 10.2 and logon on in 10.2.4 mode. I don't know if anyone else has had any problems trying to install older vesion of the OS X system, but perhaps someone has some advice about this problem.
Does it boot up from the CD at all? I don't remember what 10.2 did, but is there any way to access the Disc Utility from the CD? You might have to dig through the menus, I know that it's in a very clear spot on Tiger but that it used to be hidden deeper.
If you can find that, erase the drive from there and then you shouldn't have any problems re-loading the OS.
I am not really understanding what is happening when you try to start up off the CD. However, if you startup off of the OS X installer disk, by holding down the "C" key, immediately after hearing the startup sound, you will get the OS X install window. You'll also get additional options from the pulldown menus at the top. If your Mac does not startup (to the install window) from the installer disk, then you may not be using the installer disk that came with that Mac (ones from other Mac models will not work most of the time). If the disk is damaged or you've chosen a disk other than the installer disk, then that could also be your problem. Finally, you could try unplugging any peripherals devices attached to your Mac to confirm they are not interfering.