Some classes I have one big long desk, others it's a fold out desk from the Chair. I find it works on nearly anything ( I have a 15"), but whats more important is the type of class and prof's style of teaching.
When it comes to size though, as long as the powerbook isn't hanging off each side more than about 2 inches, I think it's ok. I don't see how it would damage your powerbook. It's not like your pounding on it to type (at least I hope not).
RBMaraman, when it comes to notetaking, it depends on the class. I had a Psychology class where the prof used PowerPoint with nicely laid outbullets at different levels. There were a few diagrams, but they were mostly out of the textbook. So I used OmniOutliner, which was great for studying. If you havent used it before, it is pretty much a really feature rich list maker - so I had colours and sizes for each level of the list. With each deeper level, my notes got more detailed. When it was time to study I would read and study everything, and then when I understood a section enough, I could click on a little triangle to have all sub-levels of that point disappear. So now I would look at that simple sentance and it would trigger me to remember everything that was deeper in the list. So evetually I would have maybe 6 words for a whole chapter, and each word would trigger more complex ideas and each one of those would have even more. I hope that made sense.
For my degree related classes (Business degree), most profs use powerpoint and post them to the web, so you can download them and print them - the I just add notes as the profs speak. It's pretty common for most classes in the business school.
I've seen one guy in an economics class of mine use a Wacom tablet - he types everything, but then switches over to painter to draw diagrams and graphs and pastes them into Word - I sit beside him sometimes, and the drawing seems to be very slow and tedious for him. Unless the class is mostly text notes, I don't even consider using my powerbook.