You're netbooting.  Did you unpack all of diskimage.tar.gz on the
server somewhere, NFS-export it, and point the bootp/dhcp
root-directory for your 240 at it?

Did you run sysinst once you netbooted?
That's the right thing to do.  


Just ignore the old 1.2 notes about disklabelling and dd'ing and
untarring by hand; sysinst does it all for you if you've netbooted
(or just dd'ed the diskimage.gz onto the target disk under Linux.)

Theres no need to label the disk anymore, the 1.3.x diskimage and the
1.3.x kernels are crafted to ignore the label in the dd'able
diskiamge, and fake up an incore label on boot using SCSI pagemode
info from the disk.. sysinst then lets you carve that up into
partitions via a curses UI, then do the install.

It sounds to me like you're looking at the wrong instructions...

(Simon? maybe we should retire the old pages?)