I have successfully created a number of bootable CD images using the
following mkisofs(8) options:

mkisofs -o image.iso -b i386/installation/floppy/boot-big.fs -c boot.catalog \
            -l -J -r -L dirname

All of these images were ~200MB in size.

Similar images ~250MB in size created with the following mkisofs(8) options:

mkisofs -o image.iso -b i386/installation/floppy/boot-big.fs -c
boot.catalog -l -J -r \
                -allow-leading-dots dirname

...work in systems without floppy drives (laptops), but in a system
with a floppy drive, I see the following during the display of dmesg:

...
fd0 at fdc0 drive 0: 1.44MB, 80cyl, 2 head, 18sec
boot drive: fd0
device cd0 (0x600) not configured
root device (default fd0a): _

...where booting stops waiting for input.

Updating all code to 4.0_RC1, & using the same mkisofs options as above:

mkisofs -o image.iso -b i386/installation/floppy/boot-big.fs -c
boot.catalog -l -J -r \
                -allow-leading-dots dirname

...produces a image which reproducibly doesn't boot with the following
unsuccessful dialogue displayed when booting on any system:

>> NetBSD/i386 BIOS Boot. Revision 3.3
>> (builds@wb43, Tue Sep 11 09:43:11 PDT 2007)
>> Memory: 636/2086720 k

Press return to boot now, and any other key for boot menu
booting fd0a: netbsd - starting in 0
read header short
boot: fd0a: netbsd: Inappropriate file type or format
booting fd0a:netbsd.gz
open netbsd.gz: No such file or directory
boot: fd0a:netbsd.gz: No such file or directory
booting fd0a: onetbsd - starting in 0
open onetbsd: No such file or directory
boot: fd0a:onetbsd: No such file or directory
booting fd0a:onetbsd.gz
open onetbsd.gz: No such file or directory
boot: fd0a:onetbsd.gz: No such file or directory
booting fd0a:netbsd.old - starting in 0
open netbsd.old: No such file or directory
boot: fd0a:netbsd.old: No such file or directory
booting fd0a:netbsd.old.gz
open netbsd.old.gz: No such file or directory
boot: fd0a:netbsd.old.gz: No such file or directory
>

I have not fully understood the floppy size limitations imposed on
images created by mkisofs(8), nor what exactly these filesystem
templates are:

$ file i386/installation/floppy/boot-big.fs
boot-big.fs: x86 boot sector, code offset 0x3c
$

Is changing the manner used to create these system images as described
in the following a better choice?

http://wiki.netbsd.se/How_to_build_your_own_NetBSD_LiveCD

Any clarification offered would be greatly appreciated.

Jim