Try putting the kernel in a folder name "Linux Kernels" in your System Folder, or in a folder with the same name next to the BootX App. The ramdisk.image.gz can be put anywhere and selected under the options button on either the app or extension. You need the kernel to boot, although I've had no luck getting the installer to actually install a kernel or modules in the fresh installation - I execute a shell in the installer and copy my kernel and modules to the appropriate locations by hand and use Quik-MacOs to install the bootblocks to load directly from OF.
FWIW - I like debian on my smp s900 much better than MacOS, but installation is still not a point and click experience.... good luck Tom