The Cobalt RaQ3 and similar machines do not (as far as I am aware) support booting in any way other than an IDE disk or network booting. You can't boot from a CD-ROM because there is no way of attaching it (maybe if you had an IDE extension cable or an external SCSI CD-ROM - but that's a pain). I don't believe that USB booting is supported. Network boot is a PITA and doubly so for a Linux install so the only Linux install option that's viable (IMHO) is to install on an IDE disk in another machine and then move the disk to the Cobalt (which is quite easy).

Just do a regular Linux install on a desktop machine with an IDE disk, install a Cobalt kernel with /vmlinux.gz being a sym-link to the kernel (NB my kernel patch for Cobalt changes the link proceedure to just gzip -9 the kernel instead of making a zImage - a zImage is not supported by the BIOS).
As the Cobalt boot process is totally different from the boot process for a desktop machine (the Cobalt BIOS loads /vmlinux.gz and does not support boot sectors etc) you can have a hard disk configured for both booting a Cobalt machine and booting a desktop machine - this is really handy in case you mess things up. ;)

The Cobalt machines don't have a virtual console so you only want a getty running on /dev/ttyS0. You need a Cobalt patched kernel as a regular kernel will not work. Also the Cobalt machines use 486 class CPUs. I suspect that recent releases of Fedora won't work on them because of this but haven't got around to testing.

The Cobalt BIOS images that I have tried have had some bugs. The latest version I tried did not boot a Qube. New ROM images are available on Sourceforge. The version I use is here.
The ROM source is based on Linux kernel source and has the same bugs. The ROM version I use (because the later versions I tried didn't work properly) doesn't support booting from an ext3 file system with XATTRs on sym-links (IE SE Linux file labels). I used to create a /boot file system on a machine without SE Linux to avoid the labels and use dd to copy it in, but this is a gross hack. So now I have converted one of my Cobalt machines to XFS which works without any problems. I will soon convert the other machine to XFS and recommend that you only use XFS on Cobalt machines to avoid these issues.