Be sure not to choose novice mode when running the installer. It might try to install onto HD1. The other modes ask where to install.
You can simply and quickly create a backup of your system HDD with lha:
lha -e -r -a -x a hd1:backup hd0:#?
Then create an emergency disk with the OS3.5 installer and boot from it. This way you can check if OS3.5 runs on your hardware at all without changing anything on your current system.
When running from the emergency disk, you can install OS3.1, OS3.5pre and OS3.5 in one session, without a single reset inbetween.
If installation fails or you miss some of your tools, you can simply extract them from the backup. Or format the boot partition and extract the entire backup in order to revert to your 3.0 installation. If your emergency disk works and the backup is ok, too, there is nothing to fear. Just make sure you have the LhA program either on the emergency disk or somewhere on HD1.
Bye,
Thomas
