1.) Good for 2002. Is it the one with the "mirror drive doors" and the Buick Roadmaster vents in front? A classic. Not a dual core, but two separate processors. Same effect, though.
2.) OS 10.2.8 only uses about 2-3 GB of drive space. Some other stuff is taking up the rest. Look for movie files or music files to be using so much space. Really fierce drive corruption can cause a false space reading. Try to fix it with Disk Utility. You have to unmount the drive volume to fix, so you have to boot to the install DVD -- can only verify while booted to the hard drive.
3.) Should be IE 5.2.1 or 5.2.3, not secure, mostly trash. Firefox 2 will work if you can find it. Search for "old software" in Google / Yahoo. Mozilla doesn't have anything older than 3.0 on their site now, but Camino is similar. Another option is iCab 3.0.5 for PPC, link below.
4.) Yes, you can erase the drive (marks every file hidden and unprotected, makes a fresh file system/directory structure) or even "low-level format" (not really LLF, but most people use this term) to write a fresh partition table, choose one or more partitions. The file system (PC guys call this a "format") must be "Mac OS Extended" for OS X, the same for OS 9. External drives or other internal drives or partitions can be FAT32 if needed, but Disk Utility isn't good at repairing FAT32 volumes. But what's this "Upgrade" stuff? Should be the full tilt installer or you may need 10.1 to use an upgrade disc, or... let me think... could it be a set that was meant to "upgrade" OS 9? That would make it a full install, not really an upgrade. Three ways to boot to the DVD (I doubt it is a 4-CD set):
* Put in the DVD, wait for the auto-play to open the window, and click the icon "Mac OS X Install"
* Put in the DVD, restart holding the C key.
* Put in the DVD, restart holding the option/alt key, when the DVD icon appears, click on it and press Return.
A language choice appears, choose, an install window appears. The "Installer" menu should have an option to open Disk Utility which has an Erase tab. Be sure you really need to erase. There is no defrag issue with a Mac file system, so unless the drive has some nasty corruption that can't be fixed, think twice about erasing the drive.
5.) OS 9 is the Mac OS before the UNIX style OS X (as in Roman numeral ten). Many people like to keep OS 9 because they have older applications ('programs' to PC guys) they still use that won't run in OS X. The OS 9 installer is not on the OS X discs, so if you don't have an OS 9 disc, you really have another careful decision before trashing it. The folders that are only related to OS 9 are "Applications (Mac OS 9)", Documents, and "System Folder". That's not the same as the folder named "System" which is for OS X. The file called "Desktop (Mac OS 9)" is a link to the desktop of the OS 9 default user. When booted to OS X, it lets you quickly find a document that is saved to the OS 9 desktop. If you have no use for OS 9, you can trash all three of these folders and the link (called an 'alias' in Mac parlance).
6.) You can go directly to 10.5 in one fell swoop. Your PPC Mac can't use 10.6. You can't launch OS 9 in the "Classic Environment" (a hardware and software abstraction layer) while booted to 10.5 like you can while booted to 10.4 and earlier. Yours is the last generation of Macs that could boot to OS 9; in 2003, the boot ROM was changed to nix OS 9 boot. You can partition the hard drive or install another drive (should be two IDE busses on the logic board, so up to 4 internal drives are an option) to permit using more than one version of OS X. It isn't necessary to isolate OS 9 on a different drive volume, since it has no boot files named the same as any of OS X.
7.) Flash Player installs two plugin files. Look in /Users /yourhomefolder /Library /Internet Plugins for "flashplayer.xpt" and "Flash Player.plugin". Look in /Library /Internet Plugins for the same two files. Theoretically they only need to be in the homefolder area, but copy them to both, restart. If it still won't play Flash content, delete those files from both locations, install Flash Player again, copy the to both locations, restart. If even that fails, open Disk Utility, select the "First Aid" tab, repair permissions.