You can't do it that way, because one Mac is Intel and the other is PowerPC. And it's not because the OS installation is different. It's because of something more obscure called the +partition map scheme+ of the hard drive.
For a drive to be bootable on a PowerPC Mac, the +partition map scheme+ needs to be +Apple Partition Map+. For an Intel Mac, it is called +GUID Partition Table+. An Intel Mac can actually boot a drive that is either +Apple Partition Map+ or +GUID Partition Table+; however, when you run Installer to do a Mac OS X installation, if you are using an Intel Mac (such as a MacBook) to run the installation, it will insist that the +partition map scheme+ of the drive is +GUID Partition Table+.
Therefore, because you used FireWire Target Disk Mode to run the installation from the MacBook targeting the iMac hard drive (as its external drive), the +partition map scheme+ ended up being +GUID Partition Table+. A PowerPC Mac that has Tiger or later can access a drive that is +GUID Partition Table+, but can only boot the drive if it is +Apple Partition Map+.
What you may be able to do instead, is the following.
Use the MacBook to install a fresh Leopard installation onto an external drive. Restart from it and run Software Update, and make sure it is working. Then restart from the MacBook's own drive again.
Connect the iMac using FireWire Target Disk Mode to the MacBook as you did before. Use the MacBook to erase the iMac's hard drive using Disk Utility. Instead of using the
Erase tab, use the
Partition tab. Reset the +Volume Scheme+ to *1 Partition*. Click the
Options button, and select *Apple Partition Map* there as the +partition map scheme+. Back on the main window, name the volume and set the format to *Mac OS Extended (Journaled)*, and
Apply it.
Now, you have the iMac's hard drive with the proper +partition map scheme+ and
format. Use a cloning utility, such as Carbon Copy Cloner or SuperDuper, to clone the fresh Leopard installation from the external drive to the iMac's hard drive. Since cloning is done at the volume level, not the drive level, you should get a bootable clone of the Leopard installation on a drive that can be booted by a PowerPC Mac.
Leopard is
universal so I think the above method will work. However, there may be complications such as the proper drivers for an 800 MHz iMac G4 not being present in the Leopard installation, because Apple does not officially support that model with Leopard.
Note: To be legal, the Leopard license you are using must not be currently used on another Mac. If the MacBook is currently using that Leopard license, you should not do it for legal reasons.