I'm using a new iBook to write this!!
Got it last Saturday. Apple Store built to order with an upgrade from 30 to 60Gb. This can be done yourself for an old one, but it is nice to have a new one with a factory-installed drive and a full warranty. If you get a second-hand iBook, and there is a malfunction during the next year you will end up paying out more than the diff between the second-hand model and the new.
The less-new will have a guarantee, but will be much less appealing a year from now, as it is already dated (there is also a psychological difference jumping to Ghz from Mhz, if you might re-sell it down the track when all will be Ghz)
A 1Ghz with 512 level 2 cache - you have your answer. Get a new one - you won't regret it! 800 may cut it for web browsing, but other apps need something meatier (and web rendering will be quicker to boot). Multiple apps will appreciate a bigger cake to cut up.
Don't forget that the new iBook has 256Mb of memory soldered to the motherboard, and you have one empty slot to add up to 1Gb extra. The older iBook's existing memory will have to be jettisoned before you add new memory, however.
Buy that new, new one!!