Cannot Install OS X On This Machine

Hey guys,
So, I bought a copy of OS X for the Installation DVD. I already have Tiger installed, but I threw away the original DVD that came with my iMac. (iMac 24" Core 2 Duo) I know, this is dumb, and a waste of money, but I don't think I had too many other options, and I needed to reinstall. I deleted the library folder to get my Safari tabs back to normal (which worked, believe it or not), but in the process, I also deleted all my fonts, widgets, etc. So...my only option was a reinstall.
So, this is where the reinstallation DVD comes into play. I inserted it, and I clicked on Install Mac OS X. I get this error (http://img234.imageshack.us/img234/3091/picture1cm1.png). So...I don't know what to do with it, but I read somewhere that holding C during boot-up boots from CD. I have tried this numerous times...to no avail. I have a Wireless Keyboard, which I thought could be the problem (maybe it wasn't loading initially), but I plugged in an external, and that didn't work either. Also...I should mention that holding Alt works just as usual. So...the next thing I tried was to change the Startup Disk in System Preferences. For some reason, the Install DVD isn't even an option! I have also tried Verify in Disk Utility, which tells me to repair (http://img77.imageshack.us/img77/6725/picture1pj0.png), so I try to repair (http://img77.imageshack.us/img77/4883/picture3oe2.png). Wow...seems very screwed up to me.
Guys, I truly have no idea what to do here, I would appreciate any and all help! If you need more information, be sure to ask.

You're welcome.
This wouldn't be illegal for you since you have no way of knowing if the seller has removed this copy of OS X and iLife from their computer which is obviously very doubtful.
This person could wind up in the same boat as you - wanting or needing to re-install something or perform an Archive & Install or an Erase & Install, etc. which I don't understand for the sole purpose of recovering what amounts to a few bucks.
Even though you found an Intel iMac restore package, it must also include the identical build as the install package that shipped with your iMac model when new.
So I suggest that you quit wasting your time and more money on eBay trying to purchase a replacement install package for your Mac that includes an identical build required for your Mac and do as Neil suggested by contacting AppleCare explaining your situation. You should be required to pay a shipping and handling fee only and even if you are required to pay full price (which is doubtful), you will be assured that you are getting the correct install package for your Mac.

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