This is the standard os x startup screen. Usually before you hear this you hear the wonderful startup chime. Ah...how soothing.
This of course is the OS9 screenshot you will get once you successfuily startup from the interal CD drive. External CD drives will not work.
Welcome to the world of troubleshooting. Chances are if you seek answers elsewhere on your troubleshooting needs, you will get many different answers. Still there are some general principles that can be used as guidelines when you face the problems of being a mac user.
Startup problems:
For whatever reason your mac will not boot. You may have installed OS X most of the way and it flaked out or OS9 hard disk is having B-Tree problems. The problem is your internal hard disk will not mount for whatever reason. You might even get continuously the flashing folder icon with the question mark over it.
For the old flashing icon over the folder the thing your computer is doing is searching for a valid startup drive, but for whatever reason cannot find one. Sometimes, if you wait or do a restart, the problem solves itself. However, using a disk repair utility after successful startup is recommended.
Failing that, you need to startup either from a CD drive or try to "target drive" your hard drive to remove any data you need to backup.
So, to boot your mac from an internal CD drive using a boot disk or system disk. For OS 9 users, all you needed to do was to make sure you had a disk with a finder and system file on it and that usually did the trick.
The thing to do when starting up from the CD drive is to shut down your mac after inserting the CD. Press the "C" Key on startup and wait.
In OS9, you will know you are successful by the CD Background showing up. Norton Utilities also has a similar background to diffentiate.
To make a Mac OSX bootable CD, there is a new app called BootCD.
There is nothing worse than seeing this icon on a dark screen. This means that your mac has bitten the big one.