Target Disk Mode is available to all Macs with Firewire. Thunderbolt Macs may have the same capability with Firewire adapter, though this has not been tested here. When you have a malfunctioning optical drive, and an optical drive based operating system you can use Target Disk Mode as a substitute. Be very careful you obey the sequence here. Some malfunctioning optical drives can be repaired simply by replacing the PRAM battery. PowerPC Macs can only boot Mac OS X off Firewire or internal drives. Macs in general can not boot off an operating system older than they are. However, they may be used in this sequence to install an older operating system.
1. Put machine A in target mode by holding the T key.
*2. Insert the compatible installer CD for machine B in machine A's optical drive.
3. Tell machine B to go into the startup manager. This tip explains the Startup Manager:
4. Connect machine B to machine A.
5. Machine B should now be able to install that operating system on machine B.
* A compatible installer would be a newer retail, up the limits of machine's B hardware or the original installer for machine B which if lost can be obtainable from AppleCare.
I installed via target mode 10.5 retail onto a second partition of my iMac 11,3 which can't boot anything older than 10.6.4. My MacBook Pro which dates from 10.4.7 days is now booted off that partition as the iMac is in Target mode.
Obviously the iMac will still never boot off 10.5.
This is a spin off from the discussion here: