Your first bit is correct but this bit is absolute bollocks. The iBook runs a reasonably warm to hot G4 and running it in closed-lid mode is not recommended, even by the bravest of us. Closed-lid mode in an iBook is most certainly not supported by Apple and you should not be spreading false information by saying that it is. Even using an external display in anything other than mirrored mode isn't supported by Apple.
The iBook dissipates much of its heat through the keyboard, putting a cover on that would result in catastrophic failure of at least the LCD screen if not the iBook itself due to the build up of heat. The TiBook and PowerBook G4, as well as the MacBook Pro and MacBook are designed to funnel heat out through side-mounted vents rather than up through the keyboard, this is why you have no problems running a TiBook with the lid closed.