I think there is a bit of a compromise to be had here - leaving an iBook on all the time (esp if the screen stays on) will probably reduce it's service life.
Semiconductor chip manufacturers actually use elevated temperatures to deliberately shorten the life of chips under test, and so extrapolate how long the things should last at room temperature. It therefore follows that leaving your iBook turned on and doing something CPU intensive (like SETI@home for example) will shorten its life. The problem is exacerbated in laptops because there isn't so much air flow around components to keep them cool.
On the other hand, constantly powering up and down is also bad - parts of your iBook do get warm/hot in use and the constant expantion and contraction of components can weaken connections on the logic board.
There is also the issue of battery life - batteries can only be charged/discharged so many times, so always sleep your iBook as soon as it is idle when running on battery.
Basically, if you are going to need the iBook up and running again within an hour or so, it is probably better to leave it on (assuming you are connected to a power supply). If it is going to be a bit longer, then sleep is a good compromise. But if you don't need it over night, powering it down probably makes most sense.
Just my opinion and 2 cents I might add
Andy