Can you partition the HD of a G3 iMac for OS 9 and OS X?
Yes. My old notes had me putting OS 9 on the first partition but I'm not sure if that's compulsory or just recommended.

Then in OS 9 you have control panel to choose your startup disk and in OS X you have a system preference.

In fact it's technically possible to have both OS 9 and OS X installed on the same partition. Install OS X first and then OS 9. You may find later versions of OS X will have trouble blessing the OS 9 folder if it is in the same partition but it certainly worked up till 10.4

Check out this old Apple tech note: http://support.apple.com/kb/ht1732