Note that you must not have a disk inserted in that device or you won't be able to mount it. When you reach the disk you want, press X to mount it. Press up/down to scroll through the list of floppies or cdroms. Press left/right to switch between floppies and cdroms. You'll get a field that shows a floppy or cdrom. As long as you have a bootable hardfile, bootable cdrom, or the combination of a non-bootable hardfile AND a bootable floppy, the video doesn't go out to lunch. When you have the floppy and cdrom set as removable devices (and not just missing when not in use), sometimes the Mac video 'stops' - you get the initial dither pattern and nothing else, even though the Mac is still running in the background. but that led me to a weird quirk I'm not sure is due to B2 or not.
Even more stuff - the CPU frequency is set by the prefs, and networking should be working (it's just impossible to set the network settings on the Mac side since there's no keyboard).