Symptom
The Mac OS 9 Installer may inform you that you do not have enough hard disk space to complete the installation. For example, you may see a message that contains a statement like "313 MB required, 290 MB available."
But after restart, the System Folder takes up only 160 MB of hard drive space.
Solution
During installation, several temporary folders and files are created. These require more room on the hard disk than just the amount needed to install a System Folder. If you need to make room for a Mac OS 9 installation, you can copy files to another partition or disk, then copy the files back over once installation is complete.