It's a matter of arithmetic, mostly. Go to apple.com , support tab , specifications and read all about the different models. An informed consumer is a happy consumer.
http://www.info.apple.com/support/applespec.html
IMHO you *need* 512MB RAM and OS 10.2 (aka Jaguar) and you *want* OS 10.3 (aka Panther). No iBook (yet) came with / comes with 512MB built in. And OS 10.3 has "expose" which is a fabulous feature that helps you manage all your open windows.
If you're perfectly happy w/ it's configuration as paid for then OK. But if you have to spend $100 for airport card, $100+for memory, $125 for OS upgrade, want to replace the HD... then you might as well buy a newer computer.
Other than pure MHz, I think there is no practical difference between the guts of the 500 - 900 MHz (all G3 CPUs) models. But I think video memory went from 16MB to 32MB on the 800 MHz model, and Main ram went from 64 to 128 in the 700 MHz model.
$300 is pretty cheap. I bought a 900MHz iBook just two weeks ago for about $550 + $90 for memory upgrade + shipping at
www.techrestore.com Came with a no questions asked refund policy and a 6 month guarantee.
Keep in mind that about Jan 16th the current iBook model will most likely be out of date too.