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EDIT: That gray disk you show is specific to the iMac, not your iBook. I can't really help with the OS X disk or why it's Kernal Panicking (the code lines you are getting).

10.1 is the earliest that'll work on a 600 MHz iBook, so that'd explain why 10.0 isn't working.
 
10.1 is the earliest that'll work on a 600 MHz iBook, so that'd explain why 10.0 isn't working.
Well, that totally makes sense. Thanks for that!

Honestly, if you want to run anything remotely useful you're looking at a minimum of Jaguar and that's really stretching it.
 
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