MacOSX.org: No CD MacOSX Installation: 
No more burning CD's! Use these steps to install MacOSX from a second partition.
This installation requires a valid MacOSX system build and at least three partitions of 1GB or larger. Do not contact MacOSX.org for the latest system build. requests of this nature will be ignored.

1.) Start in MacOS 9, and create two more partitions, one of at least 650MB and the other of at least one Gigabyte.

2.) Lock your MacOSX toast image via the Get Info command in the file menu.

3.) Mount the image using Adaptec Toast or Toast Image Mounter

4.) Use Apple Software Restore 2.1.1 to image the OSX CD onto the 650MB partition.

5.) Select the imaged partition using the System Disk utility provided on the CD or here.
(Also, the option key can be used at startup on New World ROM machines to select the boot partition)

6.) Reboot the computer and the installation will begin momentarily.