I think both OS's would run well on your iBook. Leopard has more features than Tiger, and as you mentioned, Leopard will probably be the last PPC OS.
As of now, Snow Leopard is listing as Intel only.
Personally, I would go with Leopard. After using Tiger, you would eventually want to upgrade to Leopard. Most that have problems with Leopard usually just use the "upgrade" install, and it has caused some problems. I would recommend the "erase and install" option and start fresh. Afterwards, update to the latest version, 10.5.4 and use Disk Utility to repair permissions. You shouldn't have any problems going that route.
But it's your decision. And there is nothing wrong with Tiger. It's a great upgrade from Panther and it runs very well. I'm still using it myself and have no problems. But if I had the extra money, I would upgrade to Leopard.
You can also check Ebay for a more reasonable price. Just make sure it's the full retail version, for either one.