I tried.
The partition created must be a Linux partition.
It works, but the boot connot be made by Partition Magic, only by Lilo.
So you have to boot first and go to a Linux partition with lilo and then choose the new boot as indicated.

It seems to work only if no parameters are given. As soon as one want to give some, it hangs. May be some files are missing somewhere.

All this suggest that one can also create a 700M partition (a Linux one) and put on it the iso image of the cd rom. I did not tried.