iDVD 4 requires a 733MHz G4 processor, so it sounds like you might be out of luck. However, does anyone know if iDVD checks your hardware before it installs to see if you meet the requirements? Now that you don't have to have a SuperDrive installed to install iDVD, it might let you put it on any computer. That being said, you might only be able to install iDVD to play with, I don't think you will be able to burn DVDs without a G4, since I don't think G3s can handle the encoding/burning process.
There are no processor upgrades available for your iBook, by the way, so a new computer is your only option.