I just got a new Dual 1.25, and wanted to use the boot hard drive from my oldG4 400. After putting the drive in the new computer, it showed up and I could pick it as a boot drive in System Preferences, but it wouldn't boot from that drive, nor would it show up if I started with Option key pressed. I wanted the old drive so that all the boookmarks, passwords, hosting my domain, etc, would work easily on the new machine. I ran Disk Repair and Repair Permissions to no avail.
Then I ran the Software Install and Restore disc included with the new computer, selecting the option to keep network settings. From the limited description in the manual and/or help, this seemed like the way to go and it worked. This got me to 10.2.3 (when 10.2.5 was current), but Software Update more or less took care of that from there.
I had to turn Sharing back on, reinstall the Developer CD, and reinstall the Microsoft Intellimouse drivers. But domain hosting worked, Mail works, Safari bookmarks are preserved, Safari password, DragThing, etc. I think this saved about two days.
[robg adds: I'm not 100% positive I would recommend this practice, as there's now an old drive in a brand new machine. Something like Carbon Copy Cloner would probably accomplish the same result, but let you use the new drive in the new machine - I'm not sure, though, not having tested it in such a manner.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20030501152422107