I'm not sure it's such a good deal. I mean, you can get an 800 mhz G4 ibook on ebay for around $400. They sometimes go for more, but they can go for less if you hunt around, too. Once you add RAM and wireless to this ibook you're looking at a total cost that would get you close to a G4 laptop.
It gets tough to find appropriate prices for older macs. I mean, if a 12" ibook G4 800 mhz goes for $400 and a 500 mhz G3 goes for $200, where do the 600, 700, 800, and 900 mhz G3s fall? $240 for the 600, $280 for the 700, $320 for the 800, and $360 for the 900? It's splitting incredibly fine hairs because as new models get introduced (esp the macbook, which badly depressed all ibook prices), the price of older models has to come down, but a computer like a 500 mhz ibook is too useful to actually hit zero for some time yet.
Anyway, that rambling aside, my advice is to not by this ibook. You can get an ibook that vastly outperforms this one for a modest amount more.