I'm looking into booting up into FAI from a CD (I don't want to setup a PXE boot server).
Is it possible to have FAI boot from a CD and use the mac address to determine what to install without having to select from the dropdown?
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What you want is the "preseed" functionality of Debian installer.
Basically, you create a configuration file with all installer questions answered, use that file to compile a special kernel and boot it (or you can create a CD ISO image). Details in the Debian wiki (link above).
You'll have to create different preseed configuration files to differentiate between installations, I'm not familiar with a way to differentiate based on MAC address of network device.