As already explained I had previously bought a copy (off Apple as it happens) of Snow Leopard, and then I found this forum post.
First I installed on 8Gb SD card, and works well if slowly... also not much space free!
Then I had a go with the internal HD, but KP everytime. Hmmmmm.
Got another HD in an external SATA to USB case. The install failed, but thats the drive that had my failed effort. I re-formatted... same problem.
This HD was formatted GUID / GPT, so I used Disk utility to change the format type to MBR. I had to do this before, so I write about it here.
This time, all was good, and the HD in the SATA to USB case works great.
So now to see if I can make this work for the internal HD.
Yep, changed the format from MBR to GUID/GPT and seems to work OK.