So I bought a 06 iMac with 10.4 mavrick
What is 10.4 "mavrick"?
Are you trying to install Leopard or Snow Leopard? This machine will actually run Snow Leopard.
Anyway, if there is nothing on the hard drive that needs saving or backing up (doesn't sound like there is). Pop the DVD in the drive and restart the machine. When the screen goes black, hold the C-key until the Apple Logo appears and do not let it go until then. Once it does, it will bring you to the Mac OS X Installer.
When there, select your language (I'm guessing its English). After doing so, go into the menu bar and click on Utilities>Disk Utility. It will pull up a Disk Utility window. On the left, you should see a few drives, the top one should be your hard drive. It should show 2 things, the name of the actual drive, for instance 80GB Maxtor etc, etc and below that the partition on the drive. Click on the top piece (in my example, the "80GB Maxtor") and click on Partition.
Note: going further will erase your hard drive. Be sure all your important data is backed up.
Under the partition tab, select the drop down menu Partition Layout and select 1 Partition. (If you want more then one partition, set it up now). Name the drive, and under Format, make sure it is selected as "Mac OS Extended (Journaled)". Also, near the bottom, click on Options. Make sure "GUID Partition Table" is selected. Then click "Apply".
Let Disk Utility finish formatting. Once its done, quit it and you will be brought back to the installer. Follow the installer's instructions.
Also, make sure the hard drive is big enough. It needs to be decently sized, at least 20GB for Leopard.