Ibook or power book

Before anyone can give good advice, we'd need to know what you plan to use it for and how much money are you willing to spend.

Personally, I'd choose a MacBook or MBP over either of the outdated models.

it'd probably be best to just get a macbook from the refurb site.

You can get a pretty nice ibook 12" with 1 or 1.2ghz processor that will run leopard fine. This will cost between $200-500 depending on the condition and stock features. You will need the RAM maxed out (1.25gb) and also a bigger HD. These two upgrades will be around $150-200. If you can get one already upgraded, that would be even better. getting a superdrive installed is up to you, if that's something you would like.
But in the end, if you can only afford $500, I would suggest just getting a pc laptop and save up $$ for when you can buy a macbook if you NEED a laptop. If you don't need it right now, I would say just save $ for a Macbook. they aren't that expensive and are much faster than that ibook would be.
Hope this helps.