Yes it is possible with this
"hack". I'm using it right now, with my iBook G4 connected to a 17" Cinema Display CRT (ironically pretty much the newest Apple display you can hook up to the iBook). It's not really a hack, IMHO, since it's only enabling functionality in the video card that Apple intentionally disabled to improve Powerbook sales.
I've got zero complaints, it's worked wonderfully. I know clamshell mode (using the external screen with the laptop closed) was a work in progress last time I checked, but perhaps things have improved since then.