marcucco, your powerPC Mac will boot to your intel iMac in Target Disc mode. see article: 58583 http://support.apple.com/kb/HT1661

It sounds like you have swapped out the drives and are operating fine on the 1.2 drive, however if you wish to swap back you may just want to get that enclosure so you can reformat before going back in. You can get one at OWC for about $20 and they work great for putting that extra HD to use.

However if you simply need to reformat the drive this should work for you:

1) start up from your install disc

2) when the installer starts and the menu becomes available at the top of the screen; navigate to DU

3) in DU be sure to select your HD and not a volume on the drive. (This would typically be the first item in the list if the drive you want to format is internal).

4) select PARTITION from the list to the right.

5) under VOLUME SCHEME select 1 PARTITION from the drop down menu

6) name your volume

7) format: from the drop down menu choose MAC OS Extended (Journaled)

8) select PARTITION

You should now be able to install your OS on the drive.