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You don't need much. However, these are the things I see as possible needs:
1) The install disk must be a full retail install disk (white with a big "X" in jungle-cat pattern). The gray system install/restore disks that shipped with another model of Mac won't do.
2) You probably need for RAM even for Jaguar to get decent performance. It sounds like you have a 128MB stick in one slot and a 64MB in the other. I'd pull the 64 and install a 256MB in its place. This RAM is what you need:
http://eshop.macsales.com/item/Other%20World%20Computing/100SD256328/
(I'm pretty sure that firm ships to the British Isles, but I know RAM seems dreadfully more expensive and harder to find in the UK. Crucial.uk is another possibility)
Don't try for RAM at an electronics superstore or office supply house. They tend to look at you funny when you say "Mac." And "just any" PC100 RAM will not work. That's why I but all my Mac RAM online and from only two trusted vendors; the site I linked is one of them.
3) The Install disk probably does not include a workable copy of OS9. IF you do the best install--erase, reformat, install--you'll not have OS9 available.
Now for the potential "gotchas"
A) The 7GB hard drive is just barely big enough for OSX and few simple apps. No room for big folders of music and pics. When you install Jag, select the optional installs and choose NOT to install any printer support or foreign language support. That can keep the total system footprint to around 2G.
B) Decent browser support for Jaguar is almost non-existent. I doubt any single one will view all the pages out there. The heavy reliance on Flash animation will make most sites very sluggish. Don't expect much unless you find sites with simple coding. You will find a lot of sites that simply defy Jaguar browsers.
I'd try Camino for a browser. The last version that ran under Jaguar is here:
http://caminobrowser.org/releases/1.0.6/
C) I believe that a full retail install disk for Jaguar installs 10.2.3. For some older Macs, teh upgrade path to the final version (10.2.8) was wonky if you tried just doing the 10.2.8 Combo updater. The Path that worked was to do the stand-alone updater to 10.4, then the combo ti 10.2.6, and then the combo to 10.2.8. May not affect the iMac G3 but be aware of that mudhole.
D) You may need a Mac keyboard. Some of the startup key combos for installation and troubleshooting are not supported on some third-party boards.
Be aware that many people--including me--think that Mac OSX did not fully come of age until Panther 10.3. If you can find a full retail install disk for Panther, I'd feel better. And increasing the RAM to 396MB is more important.
The most important thing is to check back here often. There are people here who probably know more about the care and feeding of older Macs that anyone.
