If you don't select anything that very obviously has the word "Erase" or "Partition" in it, you won't erase anything. Apple doesn't plant any secret land mines to trip you up and destroy all your data.
As far as OS 9 presenting an admin password, it would never ask for any password for anything while booted to the install disc, just as OS X doesn't ask for any password while booted to the install disc. Whatever you select will take place, if it can possibly take place.
I read one person's question in this forum where he erased everything without realizing it was happening, but I think he wasn't at all able to understand even the simplest terms, such as "Erase".
You don't reinstall OS X to recover a password. You simply click on the "Utilities" menu and choose "Reset password". All that does is open a utility application that can make changes to a file called local.nidb (the netinfo databse). UNIX (Mac OS X is built on UNIX) uses a database for strict control of local and network login.