Yes, with the software included with an iBook, you can do word processing, create spreadsheets, databases, presentations, etc., and do all of the other things you mentioned. AppleWorks, which is the productivity suite included with the iBook, is more or less compatible with both M$ Word and Excel files as well. Besides upgrading to Panther a while back, I haven't had to purchase any additional software since I switched to Macintosh this past summer.
I just noticed that it sounds like you wanted a list of other things it can do. I'll give it a shot:
* AppleWorks - (word processing, spreadsheets, databases, drawing/painting, presentations)
* iTunes - Listen to music, buy music, rip music from CD's, and burn CD's.
* Mail - Well, it's an email program, so it's used for email.
* Safari - Web browsing
* iLife - Create music, sort and edit digital photos, edit videos, etc.
* Quicken - Keep track of your financial information
* iChat - Again, it's well, a chat program (compatible with AIM)
* World Book Encyclopedia - a very nice encyclopedia
* iCal - a calendar and syncing program
There's probably some things that I missed, but I think you get the idea.