First off, 1Gig isn't going to be nearly enough room. You'll need at least 3Gigs to install the basics with room left over. There used to be a problem installing Linux UNDER the 1024th Cylinder but lilo gets past that now with the lba32 option. I would honestly see about giving it more space and you may notice, as you said with 6 Gigs that you have no problems. But I would definately tell it to 'force lba' when you get to that screen.
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