Modern Intel-based Macs can boot from USB, but you will encounter some difficulties when you try this method on a iBook G4 or PowerBook G4. When you buy a OSX Panther or Tiger license you'll get DVDs by default - this is a problem when you have to install 10.3 on a 300MHZ machine which has only a CD-Drive and no firewire port. But the Clamshell iBook is able to boot from USB if you've got the right drive:
The Developer Note for Apple iBook from 1999 stated on page 30:
"The Macintosh USB software supports booting from an external USB storage device"
Indeed, my 300MHZ Blueberry iBook booted via USB from a Philipps LightScribe DVD-burner which is in an external 5.25 " NoName enclosure with USB and FireWire ports which has a Prolific PL-3507 chipset. But my new USB 2.0 Freecom FS-50 burner was not considered as a boot device by the Clamshell Boot boot menu which shows up when you press ALT right after powering the iBook. So the clue to the problem is a USB 1.1 compatible chipset - you have to try it out. If your external DVD drive is bootable, drop me a line and i will post a list later on. http://www.prolific.com.tw/eng/Products.asp?ID=9