Installing from CDs is good unless you want to install from a whole lot of machines at a time, or don't have CDs.
You can install from a local hard drive, or httpd, ftp, or nfs server. Summary: when you boot the installer enter
at the prompt.
First get the server ready if applicable. Copy the entire contents of all the CDs into one folder shared by the server. For example, if you use a Fedora Apache web server you could put it all under /var/www/html somewhere. Follow this guide
Next get the installer booted. There is a boot image on the Fedora Core 2, CD1, but it is too big for a floppy. You may be able to get PXE booting
without a boot disk at all. But once you get there, enter
You should be prompted for an install method. Choose one, and enter the network information, or the local hard drive location. hda is the primary master hard drive, hdb is slave, etc.