Today I dug out my old Mac Mini G4 to install & setup some games and turn it into a Retro Gaming Mac. The Mini was already running Mac OS 9 (from the modified install disc image) and I'm going to try and stick solely to this OS and games that require Mac OS 9 or earlier and resist the urge to dual boot with Mac OS X.
I contemplated upgrading the internal HDD for more storage, but in the end I just connected a 250GB USB external drive to store everything, which should be more than enough space for my needs.
I don't want to bother with actual discs either, so I'm using disc images with the Virtual CD/DVD Utility & Roxio Toast for a couple of disc images that it doesn't like.
Additionally I'm having to deal with the classic Mac OS file type association issues - thankfully there are free utilities to ease this pain somewhat.
Once everything is setup and installed, I'll then start delving into automating things a bit with Applescript game launchers to mount disc images, change resolution & color depth and launch games etc.