OK.
Are you using the original disk set for that specific model, or a disk set from another model iBook, PowerBook, or other Mac?
The reason I ask - it has been noted a few times in these forums that using an OEM disk set from another model can result in exactly the behavior you describe: the installed OS 9 can be used for booting, but displays in a small window.
Apparently the reason is that some of the OS components, specifically the video drivers, in the installed OS version do not match with the hardware on the machine.
There were three 800MHz iBook models released - two in 2002 (translucent white), one in 2003 (opaque white). If your machine happens to be one released in 2002, you may be able to recapture any needed components by downloading and installing the OS 9.2.2 download update. However, that update is not valid for the model released in 2003.
In case you want to try that update -
Mac OS 9.2.2: Document and Software