Older original Apple internal DVD drives could be hit-and-miss, but the Matsushita drives appear to have been MUCH more reliable than the LG drive you have.
You could use a USB drive, but it will be horribly slow since it's only USB1 speed and finding a USB - IDE or SATA bridge chipset that is bootable is also a bit hit-and-miss.
Firewire is probably the best bet, but a slightly more expensive option. I would personally avoid a QPS QueFire firwire drive, since they had a very oddball firewire bridge. Others, like LaCie or even generic brand external boxes should be fine and bootable.
Your biggest problem with a firewire drive now will be, an older case will be IDE/PATA interface, and new optical drives that can be fitted will be getting scarce. Alternatively, newer firewire to SATA bridges may be a little pricey. Getting a case that uses a full sized 5 1/4" drive will be a great advantage because you can swap in a replacement optical drive.
Finally, if you are using MacOS 10.4, for which you'll need a decent size hard drive and max RAM, should be fine, but OS 8.6 - 9.2.2 can be a problem with drivers for the particular model of optical drive.
Tray loading optical drives were pretty bad idea, since when open there is an easy path for dust to get into the optics. You can use a few good blasts of compressed air (preferably via dehumidification filter if possible) and that can sometimes clean out the dust. Also, using a camera lens cleaner on the exterior of the lens MAY improve the readability of the drive. You MUST use a non-abrasive lens cleaning cloth to clean the lens.
Good luck.