Trying to upgrade, OS X installer can't find hard drive
I got it to work by booting my mom's computer in target disk mode and attaching my Mac with a firewire cable and rebooting my computer with the installer cd. 

The installer, running on my computer, was able to recognize her disk and I was able to install the update. 

Unfortunately this solution required a second mac to work, and both macs need to have a firewire port (which are quickly disappearing from Apple's products).