Should work fine with OS 9. I just did it last week. You've got to watch out for a couple things, like mis-directed aliases, and that your email and bookmarks are saving to the correct folders (they might still be directed to the old drive) In fact, I found that by running Disk Warrior and rebuilding the directories on the blank partition before dragging the OS 9 folder to it, I got a more responsive, faster machine than I had from the traditional install route. Don't ask me why.
Also, don't ask me about OS X. Maybe direct that to one of the OS X forums?