I've got an iBook G4 1.2 and use FCP on it. In fact, FCP HD. If you know your way around the FCP's Media Manager, you can compress your DV footage down to something the iBook can handle. It won't look as good, but for straight editing with no effects and so forth, it works terrifically. Then you transfer your edit "file" back to a faster machine (in my case, a G4 dual 533) and do all your uncompressed DV renders in there.
So my answer is this, yes, the iBook can handle FCP if you:
1) Don't use exotic effects -- just straight edits
2) Use Media Manager to compress your DV footage to smaller, faster files
3) Use another, faster machine to handle the full-on rendering of the original, uncompressed footage
Now, having said that, I've used the same technique on an iBook G3 600 ("son of Pismo") with the same great results. On that machine, it TOTALLY maxes out the processor, but it still works.
I should see no reason why it wouldn't work like it does on the PowerBooks given that you feed the iBook the maximum amount of RAM. The only other limiting factors are the graphics card memory and the size of the screen (1024x768) is somewhat limiting when you have all of Final Cut's windows open.