If you have one of the early iBooks (Clamshell) without FireWire, you can run up to OS 10.3. If you have one of the clamshell's with FW, or one of the white G3's, you can run up to OS 10.4.
The memory is fairly easy to upgrade on the white iBook's, not sure about the clamshells.
As for the hard drive, both are very hard to upgrade (especially the clamshell's, probably one of the worst at that because you literally have to take out everything to get to it.) so i wouldn't recommend it.