I am having the same problem. I say start with bare.i. If that doesn't work, then move down to lowmem.i... Also, make sure you have the install.1, install.2, network.dsk and pcmcia.dsk disks from the rootdisks folder (located on the extras disk). You only need pcmcia.dsk if you have a pcmcia ethernet card.
There are two problems that I have run into so far. The first is that bare.i hangs while doing a partition check of hda... Let it go to sleep and then wake it back up. The second is that it keeps looking for a CD drive. For this reason, I'm trying to use lowmem.i. See if it works. I'll keep you tuned.