(There's no video for Mac OS 9.2.2 "boot kit" for booting your G3/G4 from an USB stick yet. Please contribute to MR and add a video now!)
Stop wasting plastic! You've been doing it wrong if you burn install CD's for your old Mac :P
This Mac OS 9.2.2 "boot kit" was made by @that-ben and makes the process of booting (and installing) Mac OS 9 on any G3 and most G4's from an USB stick a little bit easier, because not all the Mac OS 9 install CD images can be used to boot a Mac from an unlocked volume (such as from an USB stick or hard drive). This disk image does boot the computer into a fully useable desktop (albeit quite slow) and it's loaded with utilities and disk image mounting tools which will enable you to prepare and install Mac OS, everything without the need for a CD-ROM drive at all. Since the USB drive is unlocked, you can even surf the web using the pre-installed Classilla browser and go get more files, directly from the same computer you're about to install Mac OS on :P
There is no Mac OS installer on this disk image. You still have to download a Mac OS install CD ISO of your choice (Mac OS 9.2.2 Universal 2002 edition is highly suggested unless you know and want to use your machine specific Mac OS install CD) in order to install it on your Mac.
Follow these steps to clone this disk image onto an USB stick and follow the link at the bottom of that article to learn how to boot G3's and G4's from an USB stick using Open Firmware.
Once the Mac is booted off of the USB stick, what I would do is:
1) Copy anything from the internal hard drive that's worth keeping onto an USB stick or external drive and then format the internal hard drive as HFS Extended using the Drive Setup found under the Applications folder on the USB stick.
2) Use another USB stick (formated as FAT32 if your main computer is a Windows PC or HFS Extended if it's under Mac OS X) or the network to copy your Mac OS install CD image onto that Mac's internal hard drive.
3) Lock that Mac OS install disk image (click on it to select it, then under the menu at the top: File > Get Info, then check the Locked attribute on the bottom/left corner).
4) Use the pre-loaded Toast 5 Titanium to mount the Mac OS install CD image (locked).
5) Launch the installer and enjoy your freshly installed Mac! No CD, no pollution.
Pre-loaded software installed on the USB stick that you can use when booting off of it include:
Mac OS 9.2.2 Boot Kit.zip (164.02 MiB / 171.99 MB)
Mac OS 9.2.2 Boot Kit / Toast (ISO) image / Zipped
Use this to boot any G3 and most G4's into a fully useable Mac OS 9.2.2 desktop from an USB stick, pre-loaded with all the tools you need to prepare and install Mac OS 9 on your PowerPC Mac. This could also be used to boot the QEMU emulator if you wanted.
Emulating this? It should run fine under: SheepShaver