I upgraded the same spec iBook about 3 weeks ago. It runs pretty good, haven't noticed anything really annoying yet.
One drawback is iTunes sometimes lags, but tbh I think that's more iTunes than anything else, and the extra features in iPhoto '09 (faces and places) slow it down compared to iPhoto '08, but only when using those features.
I'd recommend 1.5GB of RAM though, only costs £30 and there's no point not doing it. I upgraded because I was starting to notice a lot of Leopard only software and for the ability to remove/add partitions, boot off a usb external HD (previously ppc's could only boot off firewire drives) and for Time Machine.
My favourite thing since I've upgraded is how much quicker my external hard drives mount, not exactly the greatest feature but it's the one big improvement I really like in my everyday computing. I wouldn't say Tiger's too old though (I clearly haven't noticed any earth shattering improvements in Leopard), max out your computer's RAM and it'll fly with Tiger.