To boot from a system disk, press and hold c during restart. You may have to hold a long time before the system reads enough from the oprical disk to boot,
NOTE: The disk you have needs to be an original retail install disk or the gray system install/restore disk that came with the computer. There are no legal downloabable copies of Mac OS 10.4 so those offered are ones that, at best, won't work and at worst, mess up you computer and the seller gets your money, credit card number, and identity.
New hard drives don't come formatted for Macs. You need to boot from the optical disk and format the hard drive with the version of Disk Utility that is on the optical disk.