You need 3.1 installed on your main hard drive partition before 3.5 installs. You don't need to have booted from it.
If you boot from a 3.5 'emergency disk' you can install the tweaked 3.1 from the CD, then 3.5, then CD support. Assigning the CD as a read only hard disk will work fine, but once 3.5 is installed it's worth sorting the proper CD support if you want to use CDs regularly!
Out of interest does 3.9 need the same treatment? I'm ripe for an upgrade from 3.5! (on the real Amiga that is ;-))
