I just went through the whole process and it worked fine. Used super duper to copy the original drive then restored using target disk mode and my MBP
I too installed a 320 gb WD Hard Drive in a iBook G4. No problems. However, I did test the drive with one of my hard drives utilities to make the sure there were no write errors before installing the drive.
Make sure that you print out the screw sheet (PDF), and lay out all the screws on the 3 sheets of paper. It makes it easy to keep track of all the screws, and you won't make a mistake when putting every thing back. Also, go slow and take your time. You don't want to rush on the HD replacement. It took me about 2 hours. The hardest part was take the case apart. You may want to look at a youtube video called "iBook G4 Hard Drive Swap", by smalldog.com. The video shows how the case comes apart, and puts your mind at ease when you hear the cracking sounds as the tabs are released. The instructions on the ifixit.com web site were awesome.