Hey Jason,
All you should have to do is plug in your monitor to the powerbook, close your laptop screen, let it go to sleep, then move your external mouse. It should work like a charm.
I know this might be the obvious but you do have to have an extra mouse and keyboard to make this work right.
Let me know if you have any other questions.
Matt
well if you dont have a keyboard you wont be able to type anything since your powerbook will be closed and you wont have access to the keyboard on your computer.