Thanks for the tips guys. Sorry taking it off topic but info is relevant in any case. I tried to enter a shell to do an apt-cdrom add in the hope of adding it as a source but the busy box shell is quite basic in the net installer.
I also tried the standard install image, after re-compressing it with Gzip, and couldn't get it to boot. I could download the latest and try again. For some reason they compress it with LZMA which is fine, but leave the extension off, which is confusing. And on Linux and OS4 LZMA is very strict and will refuse to touch a file unless it has a correct extension!
Also, the kernel will need to have core drivers like SATA built in, that work with udev, so it can work. Not sure if it expects them to be in the inirrd but since it is a kernel thing modules in the kernel should be fine.
What I don't understand is how small the net-installer is, about 15MB and about a 13MB kernel on top compared to a Debian net install ISO which is about 250MB!
Even the business card ISO is about 40MB. How can it be so large!?