I always thought it might be helpful to use the OS X installation CD not only for the purpose of installing the OS, but to do some repairs which can't be done when running from the hard disk. Fortunately, Apple has made this very easy. The only thing you have to do is to add the application(s) of your choice to the /Applications -> Utilities folder of the installation CD/DVD. After that, boot from the copy of the DVD, and in addition to the usual utilities, (for instance) the Terminal will appear in the list of commands you can execute if you added it before. I find that really useful, because if something goes wrong, the underlying Unix commands are most times able to fix it.
However, it was not simple to make a copy of my install CD ... this might be because of a problem with the DVD, or even a kind of protection Apple added to the disk. Every time I tried to make an image or a copy with Toast, it stopped short before the end with a read error.
Following are the steps I needed to make a copy of the Apple Install DVD I have. I believe this procedure should work also with a Panther Install CD:
/dev/disk0s3 41150400 22346460 18547940 55% /
devfs 1 1 0 100% /dev
fdesc 1 1 0 100% /dev
<volfs> 512 512 0 100% /.vol
/dev/disk0s5 16238059 1350920 14075237 9% /Volumes/reserve
/dev/disk0s7 186796504 84423052 102373452 46% /Volumes/MacintoshHD
/dev/disk2s9 3958620 3892616 66004 99% /Volumes/PowerMac Software
In my case, rdisk2 is the DVD -- the raw character device of disk2.
dd if=/dev/rdisk2 of=/pmg5install.dmg bs=5242880 conv=noerror,sync
Sit back and wait until its finished. The bs parameter tells dd to copy 5MB chunks, which makes the copy faster then using the default of 512Bytes. The conv=noerror,sync bit tells dd not to quit if a read error is encountered and to pad zero bytes for all missing data. I did this because Disk Copy and Toast always encountered read errors at the end of the disk.
open /Volumes/PowerMac\ Software/Applications/Utilities
Then copy Terminal (and other apps you wish to use) into this folder.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20031226062658193