Your procedure will not work by itself, but it is a step in the right direction. Look here Installation without CD - openSUSE. YaST can install from an iso or its contents, or the network, but you need to make the system bootable. This link describes several approaches. The closest to yours is “Installing from data on your machine”. However, if you have a broadband connection, also consider a network install. Besides the howto linked above, there are at least a couple of others in the howto list linked in the prev post.
If you have VMWare you could just create a virtual disk then install it using the DVD ISO into VMware when that’s done make a copy of your image using ghost copy it onto another partition and then reboot using ghost and copy the image to the partition, but this is only assuming you already have VMware and a ghost boot disk… you can download a boot for a floppy disk if you can use that as well.