Well I've finally made up my mind the iBook g4 is going to be retired! I've been approved for my credit and ready to buy today! I just can't decide whether to go for the new 13in mbp for 1099 with education discount or go for the previous generation refurb for 92@. Money is not the issue here, it's actually the video card situation. Has anyone had any experience with the previous generation mbp and the new one? Which did you prefer? I know the newer one claims to have longer battery life but I'm not on it for anywhere near the 7 hour claim from the previous generation. I don't know much about the newer computers as I've lived and died by my iBook g4 so any input would be great! Other then the typical web surfing cs4 will be used on almost a daily basis. That's the main reason I'm not going for the 899 MacBook.
OK, so here's the way I see it (and I recently just made the same decision):
New 13" MBP - $1049 AR from Macconnection.com, or $1099 student discount from Apple
Old 13" MBP - $929 refurb from Apple
+ $100 for 4GB RAM
= $1029 for refurb previous gen.
The new one still has a larger HD (250 vs. 160GB) and a slightly faster processor (2.4 vs. 2.26GHz), not to mention the 10-hour battery and momentum scrolling (pretty cool, actually, but the old one may support it eventually).
It was a no brainer for me...
EDIT: And just one last thing - the Macbook would actually be fine for what you're wanting to do, though I think the Pro is well worth the upgrade price. And the Macbook can be had for $799 at Microcenter, if you have one near you.
EDIT #2: And I totally forgot to answer one of your primary questions... sorry.

I've used both the new MBP (320M) and the education model 20" iMac (with the 9400M). I don't really do any graphics work, but I do play some games and I get a TON better graphics ability and frames-per-second on the new one than on the old 9400M. For example, Bioshock for Mac: I topped out at slightly less than Medium settings and 1024x768 on the 9400M; on the new 320M, I max everything out and run at 1280x800 (native res). These were the highest settings that I felt were smooth and playable on each.