Yes... you can.
Even though the iBook does not officially support clamshell mode (closing the lid and using an external keyboard/mouse/monitor) the hardware is every bit capable of the task. Apple, in an attempt to differentiate between their low end line and high end line has disabled this feature, along with screen spanning, via firmware flags. (as far as i understand it)
Now we have a great utility called SwitchResX. It is not free... but a modest $15 shareware fee. At first you may say why not just make little hack like that free? And in truth there probably is a little script out there to do this for free. But SwitchRes brings a lot more to the table.
From contextual menu control to screen spanning, clamshell mode to resolution profile sets, this utility will handle everything you need it to when it comes to managing your external monitor from your iBook or iMac.
I don't work for these guys... they just saved my $1500 iBook investment from being a waste. So they get my plug.
I bet this little app will solve your problems.
http://madrau.free.fr/html/SRX/About.html
-ciphex
NOTE: also take into consideration that even though the iBook will fall asleep and wake fine via external keyboard, the USB ports are not powered when the Power Adapter in not present. So if your external keyboard requires power (wireless etc.) then your power adapter will have to be plugged in. this part confused the hell out of me for a good 20 minutes.