Help reinstalling OS X on a 2006 MacBook

[chetmaster12]

I am trying to reinstall the operating system on my parent's 2006 MacBook. My parents are elderly and are NOT tech savvy. My issue is that they have forgotten the password and that is making it hard to reinstall the OS (The lost password is NOT the reason that I am reinstalling the OS). I have tried to boot from a Leopard disk, however it boots into the desktop (with all of the files), and then opens a window that asks me to restart the computer to install the OS, then asks me for a password. I am pressing the C key when I boot to boot from the CD drive.
What am I doing wrong/What could be wrong?

 

[McHenryB]

Are you pressing the C key before you power on and keeping it pressed until the boot menu appears? Is the Leopard disk the one that was supplied with the MacBook, or a retail one? (Macs are very fussy about this.)

 

[chetmaster12]

It is the Leopard disk that came with a different 2006 MacBook (Same model).