I WAS able to install using the hdd method. I understand that the vast majority of people wont be facing this problem because they will install using a bootable cd-rom.
Still... for the odd total newb (like me) who has to use this procedure, I think that the instructions manual should be made simpler.
This sentence, to me anyways, made no sense:
"The kernel file that matches your system (ide, scsi, sata, adaptec)
You may select one of them from “isolinux/kernel/” directory within FTP site."
First of all, the ftp isolinux/kernel directory contains lots of files, but none that are identifyed as "matching a particular system" (if this comment sounds dumb, I apologize)
Second: I have an IDE HDD, yet, the name of the kernel is SATA and the only way I could get it to work was by using the "sata" file.
I'M not sure if these comments make any sense to experienced linux user. But to me, all of this was confusing. I hope these comments can help make the procedure simpler. Unless I am mistaken, there is no such thing as a "kernel file that matches your system" other then this file called "sata". And if there are specific kernel files for specific systems, then it should be made clearer (for newbs) exactly where these files are, what are the precise filenames are, and why should one choose one file over the other.
Now... since my install was nonetheless successsful thanks to your help, I'm going to play with it now. First task: making wifi usb key work. Oh, the joy...
Thanks everyone for the help!