This generally happens with betas in the 7.0-8.5 range, however some other installers will spit it out, too. The problem is caused when installing from an Apple disk image (either .img or .dmg) from within SheepShaver. Even creating a new image within Mac OS under SheepShaver won't fool the installer. One can add the .img/.dmg to SheepShaver's list of drives, however this doesn't seem very reliable - especially when one is dealing with HFS+ images on pre-8.1 systems.
I'm sure it is possible to get this working using Disk Utility, but in this example I will be using Toast Titanium 11. 10 works as well, as should pretty much any version that can read .dmg files (probably all the way back to 5).
Using this method you will create a second disc image which will fool the installer into installing without modifying your existing disc image. Personally I just trash the Toast image after installation.
Step 1:
Select copy and then disk image. Drop the .img/.dmg file in question into the window.
Step 2:
Save a second disc image. Under Toast 10 this is also a small button.
Step 3:
I've never tried the compressed mode. But it will probably cause some problems.
Step 4:
Now that you have a Toast disc image, add it to SheepShaver's list of drives. Obviously you will need to add a second disk image to install it to.
