Installation

There are two ways to do install to HD:

Transfer LiveCD System to MS-DOS installation

As the LiveCD itself boots via MS-DOS using LOADLIN.EXE, you can store the entire system on an MS-DOS partition and boot it from the DOS prompt as well.

The downside is that your root filesystem is limited to the 320MB LiveCD image file. Unfortunately BasicLinux 3.5 is so old as to predate resize2fs, so you're on your own as far as expanding the default root image. While the LiveCD image is ~300MB, only ~20MB of that is free space, so expect to store files on your MS-DOS partitions.

The easy way to install to DOS from the LiveCD is as follows:

these instructions assume W: as the DOS CD-ROM drive letter. It may differ depending on your system. The boot CD/floppy will tell you what letter to use if you boot to the DOS prompt

Boot the LiveCD and choose Option 3: Enter DOS Prompt
mkdir C:\BASLIN
xcopy W:\BASLIN C:\BASLIN (press D when asked "file or directory")
(recommended, requires 16MB) xcopy W:\SWAP.ZIP C:\BASLIN\SWAP.ZIP;PKUNZIP C:\BASLIN\SWAP.ZIP
Reboot to MS-DOS from HDD
cd C:\BASLIN;HDBOOT.BAT

Install alongside MS-DOS to an ext2 partition

CURRENTLY IN BETA, YOUR MILEAGE MAY VARY

Create a new partition on your HDD using the LiveCD or MS-DOS FDISK (make sure it is at least 300MB)
Format it as ext2 (mke2fs /dev/hdxX, probably /dev/hda2 or /dev/hda5)
Mount it to /hd (mount /dev/hdxX /hd)
Run the install script: install-to-hd
Follow the prompts on screen

The installer will let you decide if you want to boot from an MS-DOS hard drive partition, or if you would like to create a boot floppy. It does not allow you to do both, though you can simply copy the relevant files (E2BOOT.BAT, LOADLIN.EXE, ZIMAGE) from the floppy to the hard drive after creating the floppy. The E2BOOT.BAT script it generates should boot your new installation, but if it fails, the manual command is:

loadlin zimage root=/dev/hdxX rw

where hdxX is the partition you installed to. You can append more boot options to either the full command or the E2BOOT.BAT command.