Does anyone know how the install cd process works?

Just poke around on the install CD. There's nothing particularly clever there: no boot sectors, nothing hidden. If I remember correctly, it's just a configuration file and an installer binary. The CD just gets mounted with -t iso9660 and the binary is run.

There might be some complication where upgrading the kernel is involved, but I believe that you can skip that step -- I don't recall how, though.