As Mark said, lots of info can be found in the Apple TIL section. And again, as Mark said, the OSX install will reformat your drive/partition to the UFS scheme after which it will be unreadable by your OS8.x system.
Personally, unless you have a new G3 with an 8GB or bigger HD, I'd recommend purchasing a second HD (internal or external, your choice) so that you can re-partition either system's HD without losing everything on the other system as well.
Additionally, there are two approaches you can take to running 8.x on your OSX/8.x system (one from within OSX, one without):
<ul>[*] After running the blue box for the first time (it will create an 8.5 disk image in your OSX home directory), use the Startup Disk control panel to select your original 8.5 or higher HD/partition. Now, your blue box will start up 8.5 with all your preferences and so on intact, although you will continue to have the basic blue box problems (fixing your cache setting is one of the first things to do).[*] The OSX server disk comes with a utility called "System Disk" (also downloadable from Apple). Drop the extension into your 8.x extensions folder and, by holding down the option key while booting, you can access a startup menu from which you can boot into either OSX or OS8.x. I have heard some rumours that if you make your primary HD the OSX drive you _might_ have problems getting at your old 8.x partition this way (as it might not look for other drives before booting) -- this may, however, be related to things like third party SCSI cards though, so it's just a 'be careful' thing. [/list]