Boot to CD, continue, continue, agree, etc. If desired, partition and format the drive by going to the 'Installer' menu and choosing 'Open Disk Utility...'. (Note that if you ever get a Mac OS X box and don't know the root password, you can boot to an install CD and choose 'Reset Password...' from that same menu.)
'Options' gives you options about how to install--upgrade, erase and install, etc. If you're installing onto an empty hard drive, the defaults are fine.
'Customize' is where you want to go. For doing UNIX-y things, be sure to include the BSD Subsystem. 'Additional Applications' are things like Acrobat Reader, iMovie, and iTunes. If English is enough for you, you can save time and space by not installing 'Additional Asian Fonts' and 'Localized Files.' (Though if you want to do cool techno-anime-design stuff, you might want the Asian fonts after all.) 'Fonts for Additional Languages' are only 3 MB. Finally, pick and choose your printer drivers--installing them all adds just under 500 MB.
On the installation is done, you will go through the welcome screens. All the info on the first screen is required except email address and company/school.
When the time comes to make your first account, I strongly recommend that you make it a generic Admin/Owner account. OS X (at least the early versions, I haven't tried it recently) will go buggy if you delete the first user created. For example, if you create 'bob' on this screen, then add 'sue', then try to remove 'bob' later on, it'll wig out. It's also nice to have a nice, clean account every so often in case you want to see what a default account looks like. This first account you create will be an admin by default. Admin accounts created later will have all the same permissions so it's not like you're losing anything by not using the first account on the box. So, make this one generic (like 'admin' or 'owner') and then don't ever touch it again. :-) If you sell your Mac down the road and want to delete all your own data, this will still be a usable account so the new recipient won't have to reinstall the OS.
If you are on a network, plug in during the installation. It'll find your DHCP server (if you have one) and you just answer one question (I found a DHCP server. Wanna use it?) if you want to have it set up that way.
Another nice thing about installing OS X is every time you do, you can get a free .Mac account. It's not fully-featured, but you can check out the personal home page, backup, etc. If you don't want to set up email (using OS X's Mail.app) just click 'continue' on that screen with all the spaces blank. It won't mind. To set your time zone, you can click on the world map.
Once you're in the OS X desktop, create new users as needed and start running Software Update. Rather than just clicking on 'install' on each item, check each item and choose 'Download Checked Items to Desktop'. That will save the update as a .pkg (Mac OS X package) and you can burn them to CD or put them on a local server. Then you won't have to wait to download them again if you wind up reinstalling the OS or if something goes wrong during one of the updates--which I've had happen to me more than once. Since the OS updates in particular can be big (84.6 MB for the 10.2-to-10.2.6 combined update) it's worth doing. Also, OS X can get a bit wierd if you do system-level stuff while it's updating the OS. You'll wind up rebooting more (once for each update that needs it rather than all-updates-then-reboot) but it's worth it.
So, while all those update packages are downloading, start going through your system preferences. (I always choose 'Show All Alphabetically' from the 'View' menu but I'll go through them in their default order here.) Note: you'll have to do a lot of these for each user.
Other Apps: If it didn't show up in Software Update, download Safari. But keep IE unless you're really, really anti-MS. It still does a few things better. While you're poking around on Appe's site, get X11 if you want. If you don't know why you'd want it, don't bother.
Random note: If you use Stickies, launch it and select "Confirm window closing" in its preferences.
Another random note: since there is no more Applications menu, one thing I always do in OS X is drag the Applications folder into the Dock, right next to the line.
Finally: The default OS X shell (tcsh) used to come with nice defaults. That has been changed in OS X 10.2. tcsh is now missing two important things: it doesn't remember your history from one session to the next and it doesn't have full autocomplete support. If you're in your home directory and type 'cd D' and hit 'tab' twice, you'd expect to have it show you the two possible options, Desktop and Documents. However, it doesn't. I'm sure these settings are changable, but for me, it's just easier to switch to bash. To do this, launch NetInfo Manager, click the lock to make changes, click Users and then your name, then change /bin/tcsh to /bin/bash. Click another user and save and update when asked. You could just set it to use bash in the terminal preferences, but then you'll be back in tcsh if you ssh in. Speaking of Terminal preferences, go to Window Settings and choose 'Close only if the shell exited cleanly' under 'Shell' (so it goes away when you exit) and remove ssh from the list under 'Processes.' I also like to go to 'Window' and put checks next to 'Shell command name' and 'Command Key'. Don't forget to click 'Use Settings as Defaults.'
Total elapsed time as I did this today and wrote all this: about 3 hours on a G4-500.
Software Update: uncheck "Check Automatically"
Startup: At Startup: Do Nothing
Status Bar: Show Line Numbers
Text Search: Remember Find Dialog's "Start at Top" settings