--- Before doing anything make sure you go to you system setup (F2 at boot), and make "Onboard Video Buffer" 8MB instead of 1MB. (this is so the Installation will be in full color instead of shades.)
When you get to the "Welcome Screen" verify that the OS you are using is
iATKOSv7 (Mac OS X Leopard 10.5.7 Installer)
If you are continue to the "Finder Bar" and choose "Disk Utility". Here you have the option to choose to use a partion or use the entire disk space, do as you please. When you have next thing to do is format / select your "Volume Disk" to "Mac OS Extended (Journaled)" then press "Erase". Once it's done close the "Disk Utility" (Press the red "X" in the left corner). Now you will be back at the "Welcome Screen", press "Continue" then "Customize".
Follow these instructions as followed, these options may change if you have changed any of the onboard hardware except RAM.