Is is normal when booting the Tech Tool CD that comes with the Applecare Package since it hangs (while pressing "C"? I checked the CD and it can be mounted if you boot normally.
Is it a new model that you're trying to boot the Tech Tool CD with? You can't boot from a CD with an older Mac OS X verision than the one that shipped with your Mac, according to this Apple Service & Support article: If you're trying to start up from a Mac OS X installation CD, make sure it's not too old to be used with your computer. Later model computers can't use earlier versions of Mac OS X.
I just got the iBook a couple of hours ago and updated it to the current updates. Then I tried to check the Tech Tool CD (booting while holding the "C" button.. But it doesn't boot... I also tried it with my current iBook and it didn't work also..
It could be that the Mac OS X version on the Tech Tool CD that you have is too old for your hardware. You need an updated CD. Same thing happened to me, my Panther, DiskWarrior and Tech Tool CDs booted my 867MHz PowerBook without any problems but we couldn't boot my friend's 1Ghz iBook G4 with them.
