Is this the iBook you got?

To install OS X, you might need to install a firmware update.

Also I wouldn't be surprised if you got the wrong restore disk set: as you can see from the link I posted at the beginning, assuming that is the correct iBook you now have, these shipped with OS 9 pre-installed. The restore disks have to be for the exact same model, otherwise the restore disks will never work: these are hardware specific.