I currently have a G3 B/W Powermac with a non-Apple supplied hard drive and non-Apple DVD drive. No problems. Had a G4 Quicksilver with similar non-Apple drives and never experienced any OS install or boot issues on that either.
Looking at the link you provided down below, I do remember updating the firmware, but that was AFTER my non-Apple DVD drive was installed and working fine. Was able to boot off CD, etc. Hmm... weird.
As an aside, when I went to perform a fresh install of MorphOS 2.7 on my MacMini, I simply popped the CD in right after I turned on the computer. Never had to hold the C key down. It booted right off! lol
