When installing Mac OS X Server 10.0 on a disk or disk partition that has Mac OS X 10.0.x or Mac OS X Server 1.x installed, you must check the option to format the destination disk or disk partition prior to installation.
Warning: Formatting your hard disk erases all data. You must make a backup of your disk prior to installation.
It is not necessary to reformat your disk if you are installing Mac OS X Server 10.0.x over Mac OS 9 and your hard disk is formatted as Mac OS Extended (HFS Plus).