SNM, 10.2.8 is supported on the beige G3 towers as long as your CD drive is Master and your HDD is Master on separate IDE channels (it won't boot on a slave drive in those machines).
To install OS X, just pop the CD into your little iBook and hold the C key while it powers up, letting go once you hear the optical drive going and not letting go until you see the Apple logo *and* the little spinning wheel below it. Once you see those, you can let go of C. After you choose your language, go to the Utilities menu and pick Disk Utility, use it to wipe the drive. That's true of 10.3 through 10.5 (earlier versions had it elsewhere, but since this is an iBook G4, I don't think it supports anything much older anyway).
I wouldn't put Leopard on a PowerPC Mac - I had it on an iBook 1.33GHz (12", with the Radeon 9550, 1GB of memory) and it was dirt-slow compared to Tiger. I also wouldn't put Panther on it, as Tiger (10.4) is faster than anything that came before it. So stick with 10.4.x if at all possible.
"And and if you start to bleed, stop wiping." -whm1974