The current drive has plenty of space for OSX with space left over
If your current drive is bigger than 8GB, you can't install OS X on it. A Mac with "old world" ROMs like the Kanga can't boot OS X from anywhere beyond the first 8GB of the drive. OS 9 can be anywhere within the first 128 GB of a drive. If your drive is bigger than 8GB, you need to repartition it with a 7.9 GB first partition, which will hold the OS X system. OS 9 can be installed in that first partition or in a second partition which covers the rest of the drive. If your drive is smaller than 8 GB, then you have no problem, and can install OS X on top of OS 9. It may take a couple of shots with XPostFacto to get all the options right. There were a few where I had to guess and picked the wrong one, but eventually I got it right, and OS X worked very nicely until there was a major crash and everything had to be reinstalled again from scratch.
If you don't have install disks for OS 9, then risky behavior like XPostFacto may not be a good idea.