My dad has really lousy vision. We got him a first version Bondi blue
Imac which runs Mac Os 8.6.
Will that version computer run Jaguar (or Panther?)? Also, he can't
see the flashing cursor in Microsoft Word- is there a larger flashing
icon we can get him? And maybe a larger mouse cursor as well? I know
they are available for Jaguar, but 8.6?
Thanks,
ethan sprague

Here are two possibilities:

LUPE (magnifying glass): Lupe is a utility that diplays a magnified
view of whatever is underneath your mouse cursor.
http://www.artissoftware.com/lupe.html

InLARGE Screen Magnification Software for Mac
"inLARGE software is a full featured screen magnification program for
the Macintosh which offers 1 to 16 times magnification of all or part
of the screen, the ability to invert the screen to white on black with
"smart color inversion," an adjustable cross hair option for easy
cursor location, three different glass motions, and much, much more."
Any version of the Mac OS from System 6.0.5 -- including Mac OS 8.6.
http://www.aroga.com/Low_Vision/products_detail.asp?Item%20ID=1993

hummer

You may want to call "JAN" which is a Federal government sponsored
source for information about accommodating individual disabilities. 
JAN short for Job Accommodations Network.  They are at 1-800-526-7234
and also have a WEB site: http://www.jan.wvu.edu/

Also, if your father is a Veteran, I am aware that the Veteran's
Administration in Washington DC used to have services for veterans to
help them accommodate for disabilities.

Hope this helps!