Tim:
I did a network install of FC7 ages ago, but I can't recall what protocol I used. Whichever technique it was, I would have copied the files to a directory, I didn't use a loop mount, or serve out the ISO.
John Summerfield:
You might have copied and then run createrepo. That should work.
No, I didn't do anything like that. I just can't remember whether I used HTTP or NFS for the last network install. My install booted from the rescue disc to do a network install with the files from a DVD ISO as files on my hard disc, exactly as copied from it. The copying process would have been from a loop mount, but the actual install wasn't.
But anyway, I think that's probably going off on a tangent from the original poster's query about networking installing.
I do recall having quite some difficulty the first time I tried to install. I'd put the install files onto another hard drive, and tried to do an install from a local hard drive, and despite it being mounted and readable, the install routine couldn't make use of it.
I installed another box by removing the DVD drive from yet another computer.
And the last FC7 install was using the rescue CD as the boot drive, and external drive in a USB box with the DVD ISO on it.