35?!?! That means Apple has no say that they cannot do Leopard on CDROM.

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They won't do Leopard on CD for the reason that they don't want people with lower spec machines installing it. Every machine that meets the minimum requirements came with a DVD drive of some sort as standard.

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My Power Mac G4 goes below the mimimum requirements, and it has a DVD drive. In fact, I think it came as standard on the machine. DVD drives have existed on Macs since the beige G3. Just trying to make a point...

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What hes saying is, if my Mac can officially support Leopard, there is no reason to use CDs.

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Correct, although I wasn't aware the Xserve came with only a CD originally. it makes sense though because DVD is mostly for watching/burning movies which an Xserve probably wouldn't have been called on to do. Most apps were still available on CD. Every G4/G5 or Intel machine from the 867mhz QS onwards did come with at least a combo drive as standard. The same with the G4 Powerbooks and iBooks. Some earlier machines like the 733mhz Digital Audio had them and the B&W had DVD RAM drives, but those aren't supported machines anymore.