Put the macbook into target disk mode, then attach it to your mac. Boot the restore disc on your machine and select the macbook(now in target disc mode) as you hard drive. This will allow not only the installation of the os but also the software that came with the machine i.e. iLife.
I haven't really played with target disc mode at all; I'll give that a try. Does it have to be a physical attachment (i.e. USB A > A cable), or can it be via wifi/Bluetooth?
That said I do believe the machine will simply boot and install off any restore disc.
Believe me, I've tried. Neither the 10.5 restore disc (from my 15" MacBook Pro) nor the 10.6 restore disc (from her new 13" MacBook Pro) works. Each time, it simply says something like "Mac OSX cannot be installed on this machine."