When a frugal installation is desired, then it is convenient to have a live disc because it can be used to install the required boot loader (either /wiki/applications/pre-installed/grub GRUB, SYSLINUX, or EXTLINUX depending on the format of the partition).
First acquire the latest, official, production version of Puppy Linux.
A frugal installation runs faster in high-RAM computers; install is easy to upgrade; and it can be placed on a Windows FAT32 or NTFS hard drive/partition without re-partitioning it.
If however you have enough RAM for the particular Puppy version, a frugal install is better, because almost everything (i.e. everything in pup_xxx.sfs, but NOT pup_save.2fs) is loaded into RAM, therefore called from RAM, and so loads faster.
However, if you have fast newer disks and plenty of R.A.M., frugal loses its speed advantage. On a P3-1GHz machine with 1GB of RAM and UDMA5 hard disks, there is no material performance difference between a frugal install and a full H.D.D install, provided the full install is on a reiserfs partition.
On a P3-800 laptop with only a UDMA2 hard disk, there is a great deal of difference. If you have enough RAM to hold Puppy, e.g. 256MB, then the frugal install is the only way to go.
To be able to dual-boot Puppy alongside Windows without re-partitioning then the frugal install is the way to go.
For a full installation the conventional Linux file system [/, /boot, /bin, /etc, /lib, /mnt, /root, /sys, /usr, /var, etc.] is placed straight onto the partition. A full installation runs faster on low-RAM computers.
On a full hard disk install, vmlinuz is (usually) in /boot, Firefox is in /usr/bin and so forth. On a frugal install vmlinuz is outside of pup_save.2fs somewhere on the "real" file system. Firefox in frugal is also in /usr/bin, but /usr/bin itself is not directly on the disk but rather is in /initrd/pup_rw which in reality is pup_save.2fs on the disk's "real" file-system, "union'ed" into the overall Linux / directory tree in pup_xxx.sfs using special Puppy magic.
Another thing frugal installs do is copy the pup_xxx.sfs file into ram if there is enough memory, causing applications to start slightly faster. If the computer does not have sufficient RAM, it will instead mount the pup_xxx.sfs file from the HDD.
In the case that a frugal install's pup_save.2fs file is on a flash-based drive, Puppy will actually store any changes and new files you make in RAM, and only copy them to the pup_save.2fs file on the drive periodically (or when you click the "save" icon or shut down). This is to cut down on writes to the drive to extend it's life. This behavior does not happen on non-flash media (if it does you probably forgot to set the pmedia=satahd parameter when using a SATA drive).
You can place a frugal install on a pre-existing <a href="http://puppylinux.org/wikka/Win98">Win98</a> install; the pup_save.2fs (though it itself contains an ext2 filesystem) can reside on a vfat (fat32) partition, and if you are adventurous I believe even on an NTFS partition. Which is why a frugal install is also called a "coexist" install.
Not so with a full hard disk drive install: you cannot place a full install on a pre-existing vfat or NTFS partition, because these Microsoft file systems do not support Linux symlinks.
A full install is your preferred choice on a computer with not enough RAM to hold Puppy, say Puppy 2.15CE and only 192MB RAM, because programs and data can be mounted from disk with no need to occupy RAM.