I've made bootable resuce CD's several times. I wrote a bit of a paper on it awhile back, I will paste it below. My preferred method is using a hard partition that's CD-size, and just installing a system on that, making it the startup drive, and following the procedures below. In lieu of that I also detailed how to make a bootable CD with only one partition and get everything tweeked just so.

One note: In Toast 5, you can either use the Data tab and select Mac OS CD from the popup there, or you can use the Other tab, click-hold on it and select Mac Volume there, and then choose the Select button and check bootable. This may be a better way to go, as it Optimizes the disk on-the-fly, and I've never been certain that doing it in the data window does optimize it. If so the only diff. is that the Data window will automatically pick up whether a System is bootable, and you have to check it when in Mac Volume. Otherwise...some good info here, and with some rather emphatic points made, that I've learned are best only from screwing them up a few times :-) A couple of things may or may not apply to your situation. Feel free expound on it if you want with your own experience and pass it on to others...cheers, and good day!

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My instructions here are going to include MUCH MORE than simply making a boot install CD...I'm gonna tell you how to make a RESCUE CD. You will be able to boot, run all the diagnostics/fixes/repairs you need to in an emergency situation, up to and including re-installing the entire OS off the CD.

IF you have 9.1 installed (or even if not), & enough hard drive space, here's the steps. The MOST IMPORTANT step is to have the CD boot FAST. That means disable almost EVERYTHING that isn't essential to starting up or needed for 3rd party utils. I leave SOME custom things on on purpose...but I've done this about 50 times and know pretty much what's gonna slow startup and what won't.

To preserve your old system with a minimal of hassle moving things, simply to do a CLEAN INSTALL of OS 9.1. Do a UNIVERSAL install, so your CD will be bootable on any Mac, unless you intend to never boot another mac with it (or make a copy of your rescue CD to burn for someone else...if you DO make a Toast disk image of it to duplicate, don't EVER mount it...LOCK the disk image in Get Info, and simply drag the image to Toast in the "Other" tab and click record.).
What you need to choose at the final install screen for a 9.1 custom (but universal) install:

Basically nothing but the OS itself! Uncheck the browsers, Stuffit (I do a custom tweek of Stuffit Deluxe for startup CD's), MRJ, Text-to-speech, etc....in the front panel. Go to customize, and make sure Universal is checked, and make sure you checked Clean Install way back in the beginning windows of the install. You don't need all that stuff installed on a rescue/install CD, unless you really think you need it. The bottom line is, everything that tosses something into the System Folder is gonna slow down startup and you don’t want that.

So proceed with your install, restart, & remove all non-essential startup files from the new System. You may have specific needs like USB access and Firewire access, so be sure to leave those extensions installed. You can get a GENERAL idea of what to leave enabled by looking at your original Apple install CD's system folder.
Here’s a list of what exactly I have in the system folder of a 9.1 CD I made, and I see a few things I didn't need to leave on it but did, those are noted. It boots pretty quick, but still a little slow to my liking, I could have shaved a few more things out).

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System Folder:
Appearance: Platinum Sound Theme and Apple Platinum Theme, all else is removed.
Apple Menu Items:
Control Panels (alias)
Disk Tools (alias)
File/Error Diagnosis (alias)
Text/Graphic Apps (alias)
Utility Apps (alias)
Virus Detection (alias)
Chooser
Sherlock 2
Startup Disk
Apple System Profiler
Application Support:
Adobe (For Acrobat Reader)
Snitch Plugins (For Snitch)
Norton AntiVirus ƒ (For NAV)
FinderPop68KProxy.app (For FinderPop)
Clipboard
Contextual Menu Items:
File Buddy CM
Magic Menu CM Plugin
Norton CM Plugin
Open in File Buddy CM
OpenInTexEditCMPlugin
Snitch Contextual Menu
Control Panels: (Non-essentials below are personal choices for the most part; note that prefs CAN be set on a locked CD when running it, they just won't stay at the next startup from that CD)
Aladdin Compression™ (NOT essential)
Appearance (NOT essential)
AppleTalk
ColorSync (NOT essential)
Date & Time (NOT essential)
Default App (NOT essential)
File Buddy CP (NOT essential)
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File Exchange (NOT essential)
FinderPop (NOT essential)
General Controls (NOT essential)
Internet
Keyboard (NOT essential)
Memory (NOT essential but be sure to turn off the “Startup Memory Test” in here before you remove it...leave the prefs for it)
Monitors
Mouse (NOT essential)
QuickTime™ Settings (NOT essential)
Snitch (NOT essential)
Sound (NOT essential)
Startup Disk
TCP/IP
TechTool Protection (NOT essential)
True Finder Integration™ (NOT essential)
Extensions:
Protection Extension (to write protection files to drives with TechTool Pro) (Not essential)
Aladdin (Stuffit Extensions) (Not essential)
Aladdin Transaction Engine (Not essential)
Apple CD/DVD Driver
Apple Monitor Plugins
AppleScript
AppleShare
CarbonLib
Color Picker (Not essential)
ColorSync Extension (Not essential)
Contextual Menu Extension
Default Calibrator (not needed)
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DrawSprocketLib
EnetShimLib
Find
FireWire CardBus Enabler
FireWire Enabler
FireWire Support
Foreign File Access
HID Library
HTMLRenderingLib
InputSprocket Extension
Internet Config Extension
Iomega Driver
ISO 9660 File Access
NoFinderZoom9 (Not essential)
Norton AntiVirus Additions
Norton Shared Lib
Open Transport
Open Transport ASLM Modules
QuickDraw™ 3D
QuickTime Extensions (folder)
QuickTime™
QuickTime™ PowerPlug
Serial (Built-in)
Serial Tool
SerialShimLib
Shared Library Manager
Shared Library Manager PPC
SnitchLib (Not essential)
SOMobjects™ for Mac OS
StuffIt Engine™ (Not essential)
StuffIt Engine™ PowerPlug (Not essential)
System Monitor Plugins
Text Encoding Converter
USB Device Extension
USB Mass Storage Support
USB Support
USBAppleMonitorModule
Finder
FinderPop Items Folder (has folders with aliases of all the tools I use so I can access them from the popup CM...mostly a dupe of the Apple Menu setup)
Fonts (just basic Apple fonts)
Help (NOTE: I removed Apple Help files, and Mac OS Help files, & also the extensions for them...I only keep the viewer on in the chance I may need to view some html files from the CD...Help system slows down startup & can use up to 10 megs of Ram starting up):
Apple Help Viewer (folder)
Help Center
Login
Mac OS ROM
MacTCP DNR
Panels
Preferences (I'm not gonna list all these...but you should remove quite a few for the things you won't be using or whose app you removed).
Scripting Additions (folder)
Scripts (folder)
System
System Resources
Text Encodings (folder)

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So remove all non-essentials unless you have specific need for them. NOTE: If you have a bunch of files strewn all over your (old system folder's) desktop, and files all over your hard drive, move them all into one folder inside your hard drive.

Install, reg, and TWEEK the preferences files of your 3rd party apps...install them into the Applications (Mac OS 9) folder (Move things like Graphics Apps you won't need on a CD into another folder for now...you should just have the Apple-installed things in there and add to it for this CD)...make SURE that you launch every app that gets installed for the CD so it makes a prefs file!! Be sure they’re all registered poperly and the prefs are set just how you want them. This is the TOTAL advantage of using this method to make a bootable as opposed to trying to do it with a CD image...you can restart, tweek, and be certain that everything is gonna work fine before you make the burn. No "can't find prefs" errors or registration errors on the CD.

2 Notes: Set prefs in Norton FileSaver & TechTool Protections Control Panel to NOT scan at startup! It slows you down a lot. You don't need Filesaver extension installed, you can still write the protection to hard drives without. TT Pro’s Protection extension DOES need to be installed to write protection files properly, but you can turn all the other crap off...TrashCache, Virus Scanning, Write Protection Files to New Disks, etc. Just use those features manually, turn them on and do what you want with them from the CD when you need them.

Last few things to do:

Move the System Folder & the Applications (Mac OS 9) folder into another folder on your HD. Name it what your CD will be called (e.g., Mac OS 9.1 Rescue). Give it a custom icon if desired.

Make a folder inside that called Mac OS 9.1. Copy the entire install from the Mac OS 9.1 CD you have, Minus the System Folder and any installed apps (see the gif below) You can leave out things like the 60+ meg Quicktime Sample, and Adobe Apps installers if they aren't current versions.

Make another folder called 3rd Party installers if you want...copy installs for anything you want to that. Watch the size of the entire folder as you do so it doesn't go over CD-size.

You will have four (or 5 if you keep all your 3rd party apps separate like I did) folders: System Folder, 3rd Party installers, Applications (Mac OS 9), and Mac OS 9.1. Open the main folder, arrange these and their sub-folders just how you want to see them on the CD (see below).

Close the main folder, do one final restart, then go to your "moved apps" folder (where you put the things like graphic apps and stuff you won’t need on the CD), launch Toast, and drag the entire folder you made to the Data window (or Mac Volume window), holding down the COMMAND key while you do.

Click record...it should be fine! When you're done, restart, hold down "C" or Shift-Option-Command-Delete (backspace key), it should boot right up. This works if you DON'T have a system installed on another hard drive on your puter...if so, it will boot to that one. In which case, start up holding Command-Option-Delete-SCSI ID number (the SCSI address of your CD drive) & it should boot off the CD. If not, start normally, go to the Startup Disk control panel and choose the CD, then reboot.