it shouldn't install kde to the home directory, and I'm not sure if setting kde as the wm will work if you only have the first cd (it doesn't have the kde files on it). Personally I chose fluxbox as my window manager (because it is on the first cd) until I could get kde via swaret.
But, if you don't want to reinstall I suggest using lynx (a text web-browser if you don't already know), to go to www.swaret.org
and download swaret (either version is fine).
then use installpkg swaret.pkg <---whatever the swaret package name there
you'll have to be root to do that (su) and also to use swaret
then pico /etc/swaret.conf.new (i think) and save it as swaret.conf If you want the newest stuff before you resave the file change version=9.1 to version=current.
Also, if you get the newest swaret, I think it automatically puts the file as swaret.conf so you may need to edit that instead of swaret.conf.new? I know it sounds confusing but it's really pretty easy.
Ok, then once you have done that..
swaret --upgrade -a (upgrade everything that you have)
swaret --install kde
then it'll go through and install kde, check dependencies, and prompt you to get those also. Do so, and then you'll be done. Oh, and you don't need all the language packs, etc. as it'll prompt you for a lot extra you don't need.
pico /etc/X11/xinit/xinitrc change the last line (if it isn't already) to startkde
then save, exit
if it has an error
xf86config and follow the prompts to configure your file.
Hope this helps