Superdrive does not work

Depends what you need it to do. You should be able to access a disc in another Mac's optical drive simply by connecting to it using +File Sharing+. You would enable +File Sharing+ on the MacBook in System Preference Sharing pane and insert the disc into the optical drive. Then, on the iMac G4, select from Finder's menu, +Go -> Connect to Server+. This will allow access to data on the disc, but it would not work for booting from the disc.

If you want more direct access to it, so that the optical drive acts like the iMac G4's optical drive, you may be able to use FireWire Target Disk Mode. Start up the MacBook in FireWire Target Disk Mode (if your MacBook is a model that has a FireWire port).

http://support.apple.com/kb/HT1661

Insert the optical disc and start up the MacBook in this mode. Connect the two Macs using a FireWire cable, and the optical drive may be usable from the iMac G4, as an external optical drive. This method does not work (with the optical drive) on all target mode Macs.

If you need to do things like burning, the File Sharing method will not work. However, if you can access the MacBook's optical drive from the iMac G4 using FireWire Target Disk Mode (on the MacBook), you may be able to use it for burning.

For FireWire Target Disk Mode, it does not matter what each version of Mac OS X each Mac is running. File Sharing should also work between 10.4.11 and 10.5.8 (or 10.6.2), although 10.5 and 10.6 have a easier interface for connecting; the shared Mac appears under SHARED in the sidebar of the other mac.

You can try one other method, if the iMac G4 has 10.5. On the MacBook with either 10.5 or 10.6, open System Preferences Sharing pane. Turn on (check) +DVD or CD Sharing+. On the iMac G4 with 10.5, open a Finder window and look under SHARED in the sidebar. If the MacBook appears there, select it and see if it is possible to share its optical drive. I'm not sure if this will work from an iMac G4.

If you were able to boot up the iMac using the optical drive in the MacBook (through target disk mode), I don't know why it would error out of the installation. Is that Leopard installation disc a retail disc? A retail disc for Leopard should have a starry background with a big X. A disc that came with a specific Mac model will not work on an iMac G4.

Also, if you ran the Leopard installation over the existing Tiger installation, there may have been some existing data corruption on the iMac's drive, which cause the installation to fail.

Assuming you are OK with erasing the internal drive in the iMac G4, you can try the following. Start up from the Leopard installation disc in the MacBook again; use the Option key startup to get Startup Manager. When you get to the first Installer screen, go up to the menu bar and, under Utilities select to run Disk Utility. Select the iMac's internal drive in the sidebar; be sure to select the DRIVE and not the volume indented under the drive. On the Erase tab, name the volume +Macintosh HD+ and set the format to +Mac OS Extended (Journaled)+. Then, click on +Erase. This will re-partition and reformat the drive, as it erases. It should take less than one minute.

NOTE: If there is data on that drive that needs to be recovered before erasing it (you did not have a backup of the data), please post back.

Once the erase completes, quit Disk Utility to go back to Installer. Try to run a standard installation onto the now blank drive.

So you are starting up from the installation disc that is in the MacBook's optical drive, connected to the iMac using target disk mode? You ran Disk Utility from Installer's first screen (immediately after you select your language)?

If so, there may be a hardware-related problem with your hard drive in the iMac. That might cause the errors that came up during the previous attempt as well.

The code for doing target disk mode is in ROM (before the OS even loads from the drive), so you should still be able to start up the iMac in that mode. Whether you can access the hard drive or not depends on the condition of the hard drive.