The Power Macintosh G3 Rev2 (blue) CD, as well as the Power Macintosh G3 All-in-one CD, does not have the IomegaDrive Option application. You can download "IomegaWare Tools Package" from Iomega and also get IomegaDrive Options and other useful software. The package installer will put IomegaDrive Options into the Control Panels Folder.
The IomegaDrive Options application is used to set the drive, and to replace the driver on any inserted Zip disk with the same version as in the System Folder.