ipod as install disk

in iPod + iTunes + AppleTV edited January 2014
I'm trying to install OS X 10.4 from my old 10 gb iPod. I have an old iMac with no DVD drive, and I've heard you can do this. I go into disk utility, select my iPod and erase it. Next, I go to Restore, drag the DVD to the source field. But when I try to drag my iPod to the destination, the program won't let me. I know its possible to do this because I've read on the internet that lots of other people have. What am I missing?
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