Good, you have a working state you can get back to. Put this back on so you know you having a working system and can then use the "Set Startup disk" control panel.
What? Normally you cannot install an OS on the disk you booted from.
Have a look at it with the Mac Mini, does it have a blessed System Folder? I suggest boot from the CD-ROM to do an OS installation, or boot from a "Disk Tool" or recovery floppy.
From http://www.lowendmac.com/pb2/powerbook-1400.html