Partial SOLUTION:

xorg.conf must contain the line

BusID       "PCI:0:16:0"

in the "Device" section - this will detect the ATI Rage. I had not tried this 
as I assumed that the lspci (hex-)value should be correct, but apparently, xorg 
expects decimal.
Hence, the installer needs to somehow come up with this.

Unfortunately, the r128 driver now crashes. I will open a new bug for
*that* problem.

-- 
9.04 PPC: r128 does not detect ATI Rage 128 on G3 iMac
https://bugs.launchpad.net/bugs/400864
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