I've done the exact thing once, my 1.2GHz iBook G4 hooked up to a 24" Dell display with a mini VGA adapter and Screen Spanning Doctor installed.
It worked but there were many issues - it was very VERY sluggish if you were doing anything that involved moving objects around the screen and I couldn't go all the way to 1920x1200, it stopped me at 1920x1080 which was fine but there's always the slightly blurry look when you're running an LCD at a res lower than native.
Oh, and if you do do it, don't enable Clamshell mode - you'll fry your iBook.