Shooting from the hip, my first thought was to wonder if your new 1 GB partition was set to be "Bootable". I'm don't recall any safeguards to prevent the OS from being installed on a non-bootable one.
To find out, go into HDToolBox, select Partition Drive. In the next window, select the segments of the top bar that represents each partition. Bootable (center-bottom of the window) should be checked for those partitions you would want to install an OS onto.
If this is not the problem, simply select Cancel, and then Exit to quit the program without making changes.