I just purchased an iBook G4 which came with OS 10.3.5. I tried to install the OS on my iMac (the swivel base model with a G4 processor) so that I could install an airport base station, using the OS disks that come with the iBook, but everytime I click install, the computer restarts (to start the install process) but then states it can't "install bundled software" and then completely crashes, requiring me to turn the power off to the computer. Any ideas? Is it possible to unbundle the software and just install the OSX before begining the "installation" process?

You cannot use your installer CDs for an iBook on an iMac. Not only is it not legal, it the installers are built to break, as you are seeing.