http://www.macosxhints.com

1. With Apple’s Disk Utility, create an image (DMG file) of the first Panther CD. Let’s name it “Panther.dmg” and place it on the Desktop. IMPORTANT: the image must be in read/write format so you can add files later. Don’t mount the image file yet.

2. Now head to the Terminal. Type the following:
hdiutil resize -size 2g -imageonly ~/Desktop/Panther.dmg

This command resizes the image to two gigabytes (this took 1 minute, 20 seconds on my 1GHz TiBook). Now, the partition inside the image hasn’t been resized yet. For that, type:
hdiutil resize -size 1.9g -partitionOnly ~/Desktop/Panther.dmg

Notice how the partition size is smaller than the image size. How much smaller should it be compared to the image file? I don’t know, but hdiutil will give you an error if you try to grow the partition beyond the space available in the image file.

3. Mount Panther.dmg. Now you have a disk with 1.28 gigabytes of free space.

4. Insert Disc 2 and copy all files from Mac OS X Install Disc 2 -> Packages to Mac OS X Install Disc 1 -> System -> Installation -> Packages. The Finder will give you a warning about items with the same name: select Replace. It seems Disc 1 has placeholders for all the installable packages.

5. Repeat step 4 with disc 3.

6. Open the file Mac OS X Install Disc 1 -> System -> Installation -> Packages -> OSInstallCache.plist with a text editor (or with Apple’s Property List Editor, included with XCode). Delete any IFPkgFlagProxyPackageLocation key. They look like this:
IFPkgFlagProxyPackageLocation
disc://Mac OS X Install Disc ?/**********


Where ? stands for Disc 2 or 3 and ***…. for a Package name. Removing these lines tells the Apple Installer that it should look for the packages at Mac OS X Install Disc 1 -> System -> Installation -> Packages. Delete all text from to (including these two keywords).

7. Unmount the disc and burn to a DVD.

I did this and was able to install Panther from the DVD.

Now, you can grow the image file and partition beyond two gigs (to fill the entire DVD) and copy additional installers. I used a DVD-RW so I will reburn it with the MS Office “installer” and a few extras (xCode, etc.). I guess this hint will really be helpful to people maintaining a lab full of Macs.