Replacing The Original 4GB Drive with IBM's Travelstar 20GB model
http://www.xlr8yourmac.com/PB_G3/wallstreet_hard_drive/index.html
The drive in the iBook is a Toshiba MK3211MAT (8.5mm tall?) hard drive.
http://caslis.com/mac/ibook/ibdrive.html
With a USB external case and a few quick steps, you'll have a handy removable storage space in no time.
http://www.quepublishing.com/articles/article.asp?p=404168&rl=1