Only grey screen, apple, and progress wheel

After an update, the MacBook put up a screen and told me to shut down. NO other options were available except the shutdown button. Since then I have tried starting up with the CD that came with the MacBook (Three, two black OS disks and a USB disk, It does not appear to be the full retail version with big X on it like photos I have seen in other chat threads) When I power up I ONLY get the grey screen, a delay for the apple, a further delay for the gear/progress wheel.
I have tried holding down various combinations of keys, including: shift; c; control; control and c; and waiting for several minutes after trying to restart. There is no chime. Occasionally I have tried holding down the power button for prolonged periods of time: I get a flashing power light, and then a tone (NOT the chime thing) then it goes to grey screen etc. and stays there with spinning progress wheel.
Any suggestions as to how to get my MacBook to read the OS CD?

You’re welcome.
Don’t known what the situation really is here, but if you can boot from the Install disc and Disk Utility reported no filesystem issues, you should be able to recover your data. The following is what I would have posted in my first reply if it wasn’t because of what you said about not being able to boot from the Install disc.
Problems arising right after installing a system update are usually the result of some filesystem corruption that should have been fixed first, or not having installed the update properly (e.g. applications running while installing it), or having ignored Apple’s “Important: Please read before installing” warnings, etc.
Verify/repair the startup disk (not just permissions), as described here:
The Repair functions of Disk Utility: what's it all about?
After having fixed all filesystem issues, if any, reinstall the update using the combo installer:
About the Mac OS X 10.4.9 Combo Update
Mac OS X 10.4.9 Combo Update for PowerPC
Mac OS X 10.4.9 Combo Update for Intel
If you cannot do this by normal means, but have an external HD with Mac OS X 10.4 installed from which to boot your Mac, or have access to another Mac with Mac OS X 10.4 installed and with a FireWire port to which connect your Mac in Target Disk Mode, you may be able to fix the problem by starting up that way, verifying/repairing the disk, then reinstalling the Combo Update (on the disk that doesn’t boot, not on the disk from which you’re booting to do this).
After installing the Combo Update, the computer may restart twice and the first restart may take several minutes. This is normal.
If the problem persists, you’ll have to consider doing a full Archive and Install, but make sure first that all the filesystem issues, if any, have been fixed, that you have enough space available on disk, and that all your data has been backed up (which again you can do connecting your Mac in Target Disk Mode to another Mac if you cannot do it by other means).
Take a look at the following articles for guidelines on how to properly install system updates:
Troubleshooting installation and software updates
Installing software updates

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