I loaded the disc and it booted up iatkos just fine going through the installer and got stuck at this part picture attached.

comp specs:
dell inspiron 1525
intel celeron 550 @ 1.99ghz
2gb memory
80gb hdd (soon to be replaced)

please help ive gone through disk utility and it has partitions it just makes no sense to me.

You have to go back to the start of the installation (after it says press the button) then go to utilities in the task bar then disk utility and then you have to format a partition or your whole drive to <Mac os x extended (journaled)> then close that and continue installation