fordwich,
Do not partition your 4GB HD...it is not necessary plus it is too small. If a Wallstreet has an HD larger than 8GB, it must be partitioned for OSX:
http://docs.info.apple.com/article.html?artnum=106235
You will need at least OS 9.0 to run XPostFacto, so anything from 9.0 up through 10.2.8 would be fine. However, with only a 4GB HD, you will want to do a few things:
1. Install just the System Folder from OS 9.x after initializing the HD; this will leave you the maximum space. If you install 10.1 or 10.2, you may not have enough space to install 10.3.
2. Install XPostFacto.
3. Boot to 9.x and launch XPostFacto, then load your 10.3.x CD.
4. Install the minimum OSX possible; as you go through the installer windows, there will be an Option button; deselect the printer drivers and foreign language translators.
You should be able to install a minimum 10.3.x using less than 2GB of HD space.