Live Partitioning (the feature that Josh suggested using) was only introduced within Disk Utility in Leopard (Mac OS X 10.5.x). Since you're using Tiger (10.4.x) your version of Disk Utility doesn't allow you to do this.
Doing this without a backup is at your own risk. If something goes wrong or you choose the wrong partition you can erase your entire hard drive and your files so be sure you're using the command on the correct partition.
However you can still do it from the command line (10.4.6 or newer) or by using Boot Camp (if you still have it installed even though it's not supported).
Command Line Live Partitioning in Tiger:
# Determine the disk ID of your startup volume:
diskutil list
The output should look similar to:
/dev/disk0
#: TYPE NAME SIZE IDENTIFIER
0: GUID_partition_scheme *1.0 TB disk0
1: EFI 209.7 MB disk0s1
2: Apple_HFS Myriad 999.9 GB disk0s2
/dev/disk1
#: TYPE NAME SIZE IDENTIFIER
0: GUID_partition_scheme *300.1 GB disk1
1: EFI 209.7 MB disk1s1
2: Apple_HFS Garamond 299.7 GB disk1s2
In this case the disk we care about is disk0s2 (my startup volume is called Myriad, my Time Machine backup, Garamond) and that you'll notice disk0s0 say GUID_partition_scheme. If it does not, live resizing will not work.
You can then create a new 8GB partion by running the command:
#sudo diskutil resizeVolume DISK_ID FORMAT NAME SIZE
sudo diskutil resizeVolume disk0s2 JHFS+ SnowyDVD 8G
It's important you have enough free space. It may ask you to restart the computer but you can then continue to follow the instructions to restore the .dmg onto the newly created partition.
To reclaim the space, after the installation you need to use gpt
to remove the partition:
#Find the partition (gpt show DISK_ID)
sudo gpt show disk0
Determine which partition number the Snow Leopard DVD image was restored on: the first GPT part is the EFI partition, the second should be your startup drive and 3 should be your Snow Leopard DVD partition. You should be able to tell from the size.
You can remove the partition by running:
sudo gpt remove -i NUMBER disk0
You can then resize your partition back to it's full size:
sudo diskutil resizveVolume disk0s2 SIZE
You can double check your max size by running:
sudo diskutil resziveVolume disk0s2 limits
That said, I'm not sure how making a partition is going to help you if you haven't already imaged your Snow Leopard DVD since you don't have a DVD drive.