It might be worth checking whether the iLife apps on the DVD are universal binaries.

If they're Intel-only, there is a rather rational explanation why they won't work on a G5 without invoking any "embedded hashes" and "watermark" mumbo-jumbo...

What voldenuit said...

Go to About this Mac from the Apple logo in the upper right corner and then choose More Info. When the System Profiler opens, choose Applications from the left hand column and sort by Kind.

I would still try to install iLife off the install disk in Target Mode.
Apple has a way of putting on disks both versions of applications and a lot of other things they don't tell us.
Your right, forget the drag and drop.
Go to http://dealmac.com/ to look for a firewire cable-just do a search.
You should find one for $4 to $10.
You will need a firewire when you buy a new Mac and to move files.
Once you use Target mode you will say how did I live with out it.

I'm positive they're universal, because I was able to get GarageBand opened just by copying it off the disc. It's acting weird, though; I think it's because it's not in the proper location and there are incorrect files in the system library.