1. What kind of word proccesing programs (Microsoft Word) does iBook/Mac have?
There's the actual MS Office suite (Office 2004 is the current run, but you can still get Office v.X which was the past version.) You can also download NeoOffice, which is free.
If you decide to buy MS Office for Mac, don't buy it at the Apple Store. It's available for far less money elsewhere, especially Ebay.
2. I know there is a PowerPoint for Mac but like what kind of software and what kind of cd do i get it. Is it free? Can i get it online?
It comes on CD, as far as I know. It is most definitely NOT free, unless you use NeoOffice's "Impress" (their knockoff of PowerPoint. You can buy the real PowerPoint online, but obviously it'll be more economical to just buy the entire MS Office suite together. If you happen to be a student, the Student and Teacher Edition is a great deal (a lot of CompUSA stores will sell it to you without even asking for a student ID. Shhhhh about that one.)
2. I know Mac doesnt have much third party support. but, is there a good company out there supporting it?
While this was true in the dark ages of the 1990's, it's not really true now. Adobe, most Microsoft software, blah blah blah is all supported on Mac. There's also a lot more free, open source software available for it. The exception is games. If you're a gamer, think twice before you switch to Mac, because we don't have all of them and not all of them run well on a Mac.
3. If i burn Music from iTunes onto a cd then will it work on a standard stereo system?
Yes, but if the DRM bothers you, you can use a free program called JHymn to strip it.
http://hymn-project.org/
4. Does the $999 iBook burn CD's? DVD's?
5. If no to question 5, then will most external CD/DVD burners work?
CD's, yes. DVD's, no. If you really want a SuperDrive in the 12", you can buy one for about $150 and have your drive swapped (labor charge extra, or you can try to do it yourself.)
Otherwise, an external drive usually works.
Finally, a warning about iMovie: I, too, love iMovie. But be aware that the minimum system requirements listed for iMovie are not very realistic for running the program smoothly. I own a G4 Powerbook and I've never been impressed with how iMovie runs on it, even with my hyped up RAM capabilities; the G5's are much better for it. That's not to say that you CAN'T run iMovie on a 12" iBook, but it'll be slow as molasses and you'll eat up your 40 gigs of hard drive space pretty quickly! If you really want to run iMovie on your iBook, be prepared to buy more RAM for your machine.