The way that I'd recommend you do this is to install the basic system and create a tarball of the system, then you just lob it on a CD with something like ISOLinux (most of the installers use ISO linux any way) and then just execute the tar command once the HDD is mounted. This will then extract the base system with the basic software installed onto the disk. You'll need to try and create a system that is contained in 700mb or less. I have a slackware system that is installed in this, it runs a mail server, a webserver and some extra things (including an IRCd), you'll want to make sure that the system is running without anything unecerssary (i.e. DONT USE REDHAT
). Also make sure that any source code files are deleted so that they dont take up space! The other option would be to take the /usr partition and /var and other additional partitions on the disk onto _seperate_ CDs and just tar and gzip the / and /etc partitions on the disk. This would then allow this to be untarred onto the disk and the others to be added later.
AFAIK, I havent found a decent ghost program for Linux (including *spit* commercial software).