Right, so Disk 1 (of 2) is in my computer. I put it in, then followed your instructions...when I got to the "Welcome to Mac OS X Installer" window I clicked on Utilities - Disk Utility -selected the top hard drive in the left hand corner (name underneath it is "Macintosh HD". I was in the First Aid section, first I clicked Verify Disk Permissions, then clicked Repair Disk Permissions, then I did the same with the disk, first I verified then I repaired, even if the verify said that no repars were needed.
Then I quit Disk Utility, quit Installer, clicked on "Startup Disk " in the middle of the "are you sure..."pop up. I had three options for a start-up system, first is the CD (Installer Disc) second is the Mac OS X for Mac HD folder, and lastly is a question mark icon called "Network Startup". I clicked on the folder, restarted it while holding down the Option key while started up (I actually tried all three over the past period, sometimes holding the Option key, othertimes not...always lead me back to the Installer in the end)
I'm trying all this again as I'm typing... (except I didn't do the repair disks and things, I've done it twice already.)
Sometimes the folder and question mark icon shows up briefly before the apple and the wheel. Then it goes to the language box, and then it starts "preparing for installation". Then it takes me to the Installer. (And having done it all again as I was typing this, I'm back at the Installer...)
What am I doing wrong?
(Thanks for being so patient here.. If you're out of ideas I'll still pay you for your efforts and time, and take it to the apple store...)