I have the exact same iBook (Graphite) with OS 9.2 and 10.1.5 on a
single partition.
When did you last reset the open firmware? Boot up in OS X and hold down
Apple - Option - O - F... then type in
reset-all
When was the last time you did an fsck -y? (Boot up in OS X and hold Apple - S. When you get to [localhost]... type in
fsck -y
If there are any errors, run it again.
When the file system check comes back with no errors, hit control - D to continue booting.
Many times people have problems with more than one partition for one Hard Drive. I suggest, if you can't get around this problem, that you install OS 9.2 and OS 10.1.5 on a single partition if you are not getting Jaguar for a while. Bring all your important files from your OS X partition to your OS 9 partition. Install OS X over the OS 9 partition and initialize just the empty partition. But only do this if you are still having problems and if you feel this is a big deal.
If you are having problems with Software Update, though, I find going to Apple's Site and downloading everything from there to be much easier.
