PowerMac G3 upgrade OS

First things first, let me tell you that I am not as knowledgeable with Macs as I am with PCs. But I'm slowly learning, since I am taking over the technical requests at my work and we only work with Macs.

I have a PowerMac G3 with 545.1mb of ram installed. It has OS 8.1 installed on it. However, something is terribly wrong with the whole system (thinking it's a hard drive problem but still in the testing mode), so we decided to go ahead and upgrade the OS from 8.1 to OS 9. I'm not sure what version of 9 it is, on the cd from Apple, it only has 9 but in tiny print it says SSW Version 9.2.1. Is that the version then?

I'm assuming that virtual memory is the same in Macs as in PCs. It should be turned on right?

I also have another PowerMac G3 with only 32mb of ram installed. Is that enough ram to install OS 9?

Anyway, so I've never ever even seen how to install a MacOS. The cd says to hold down the C key as the computer starts up. Is it pretty self-explantory from there? I know that with PC's, you don't always need to wipe the hard drive, it'll do it in the installation...is that the same with Macs? Or do I need to wipe the drive first...and if so...how???

I know, I'm sounding really dumb here, and I guess I am when it comes to Macs but I'm slowly learning and it's actually fun trying to figure out how these work, compared to PCs. I already have more information in my head than I've ever had with Macs!!!

Thanks so much in advance!!

1) Yes, the system version on the CD is 9.2.1. You can get the 9.2.2 update from the Apple site but it's not a major change.
2) Virtual memory should be on but if you have a lot of RAM set the VM for only 1 meg above the physical RAM installed.
3) I'm not sure if 32 mgs is enough for a basic install of OS 9 but it is inadequate for normal use. You should have at least 64 mg, 9.2.2 on my iMac takes 42 megs. If you plan to upgrade to OS X you will need a minimum of 128 mgs to install it so you may want upgrade the RAM now.
4) The install CD will walk you through the process. It will give you the option of formating the disk. Personally, I would wipe the disk unless there is something that you need to keep and can't be copied/backed-up.