Do as it says in the tutorial. You should make a directory for example C:\linuxiso, something easy to remember because in the tutorial it states:
So, you have a C:\boot with the grub directory and the two files extracted from the iso, the C:\linuxiso which has the complete iso in it and the boot.ini file with the grub line in it.

When you boot you first get presented the grub menu to choose what you want to boot. There you choose Linux (as you put it in the menu.lst).
That will boot into the Linux environment and at some point it will ask you for the installation source (see above).

When these things are available the installer will launch.

At previous installs did you put the iso on one of the newly created partitions? Because that might explain very well the troubles you had.

Kind regards,

Eric

OK cool. Good to know. I will do it all again, but this time with the ISO on my xp desktop.
Do I need the ISO in BOTH places (desktop AND other partition), or just on my desktop?

Just in the C:\linuxiso directory you create. The installer will get all information from there and install to the new partition. The partition you will use to install Linux onto has to be empty or will be formatted by the installer. So there's no use to have anything on there.

Kind regards,

Eric

During all of my attempts, the ISO has been on the intended partition. The instruction #1 is a little bit grey on that...

During no setup have I ever been asked for the destination.

Ok, lets see what happens. The intended partition is now clean. The ISO is now in C:\
.

You're right, it's a bit grey since it only gets indicated in point 7 and not in point 1 so that is confusing. Most likely this has been the problem you encountered every time in the past. Look at the iso as a virtual CD which gets accessed by the installer when booted. Once the installer starts to run one of the first tasks is to format the destination partition hence deleting the iso. So next time the installer (which is running in memory at that time) tries to access the iso it gets an error and out you go.

Kind regards,

Eric

Repeat performance:
"The installation CD ROM could not be mounted. This is probably because the CD ROM was not in the drive. If so, insert CD ROM and continue."

This is the same roadblock every time. It's looking for a disc. I can hear my drive clicking, searching...

Would it be detrimental to have the ISO (not the NETINST ISO) in the drive? Good idea or no?

Are there any BIOS settings needed to be adjusted? I think as of right now, my CD ROM drive is in sequence 1. Should I move it down the list, move HD to #1? Does not seem like it would matter though...

You can try. Might be that something in the NETINST setup is always going to look for a CD. So if the trick with the iso in the drive doesn't work, retry with the KDE CD, but following the procedure as you did right now, meaning don't put the iso on the partition you are going to use.

Kind regards,

Eric

That has nothing to do with it in my opinion since you already past the BIOS boot sequence when the grub boot is showing.

Ok thanks. For my next trick, I will attempt it all again, with KDE in CD drive....

Ok, let's get the magic working.

ERIC!!!!!!!!! IT"S MAGIC!!!!!!!!!
Light from heaven beams down!!!!!
Chorus of angels singing!!!!!!

I'm in! I'm in! I'm in! I'm in!

Ok, get your plane ticket, I've got TWO BEERS for you!