Thanks JDW for posting it for me. I got it working.
Since all of the disk images i downloaded don't seem to be recognized by Disk Copy 4.2, I tried mounting one disk image on mini Vmac and loaded it on Disk Copy 4.2 and saved it as a disk image. I used HFVExplorer to put the saved image in a diskette. Loaded the image using Disk Copy on my PB170 and successfully made a 400k disk. The disk booted fine on my Mac 128K.I remember reading somewhere that you can format a 1.4mb diskette as a 400k by covering the small square hole at the bottom right corner. I taped it and formatted (one-sided) the disk on my PB170. Tried it on my Mac 128k, 'Initialize' and it worked. I even tried copying the system files and it booted also.
I tried this on two new 1.44mb HD diskette i bought the other day and they all worked.