As the name suggests I cannot erase Ubuntu from the mac without problem or two.

Well, I first attempted to clean the slate (erase the HDD) with the install cd, which is Mac OX 10.1.2 (yes I know old, but I don't think my G3 supports anything other then this... and if they do, I don't have money to buy it... and no I didn't pay for the mac ;] )
it gets to the select drive in which to install it on... I only see the cd which is obviously Read Only. So now that I know that MacOX 10.1.2 does not read ext3, I went on to using my ubuntu disks.. since that is the only disks that I have that supports PPC. Well Ubuntu does not allow to just make free space like I had hope to (this is running under expert mode), instead it NEEDS a path plus something other then FREE SPACE, or New Word. So basicly I can create a partition that only includes a source destination path, with nothing in it...

I have tried in the past on my mac (I got for free also) the same exact thing but one revision earlier then my sisters. I did everything above, except I did another step... and that was to fdisk the drive using the console on the gnome desktop. A bad mistake because it seem to F up my drive/computer. I had to zap my pram after about a week of trying to figure out why I had a wiered console appear when booting the mac.

My question is, how do I erase linux for my sister? Or install my MacOS X for that matter?

Get a live cd that boots on a MAC and use "fdisk" or "cfdisk" to remove all partitions from the disc. You can also use gui tools such as qtparted if they are on the live cd. Another option would be to use the fedora core ppc rescue disk (if one exists for ppc).

Well I got that Idea. Anyone know of a bootable ppc disk that has cfdisk, fdisk, or similar?

The first disk of Slackware would have it; just boot it up and log in as root, after which fdisk becomes possible.

http://www.slackware.com/getslack/

I thought perhaps Slax might have it but fdisk is not on their list of packages. I can't try it out for you at the moment... but the first iso of slackware proper does have it.

Go get a Gentoo PPC 32-bit minimal iso - it will have fdisk.
No ifs, not buts ...

Just use the Ubuntu CD and abandon the installer after the partitions are deleted. That's what I always do.