This is a stock 300mhz Blueberry iBook:

And this is what it will be when you are finished:

Getting Started
You will need the following tools for this series of modifications:
Torx 7 bit
Small Phillips bit
Small Flathead bit
Soldering Iron with a grounded tip
Adjustable Speed Dremel
Tin Snips
Digital Multimeter ( for checking the continuity of resistors and cicruits )
Exacto Blade
600 grit sandpaper
Masking tape
Leatherman Multitool ( or similar... an all-purpose just-in-case tool )
Initially, I had purchased this Clamshell just for the Airport card, but upon lifting the keyboard, noticed the previous owner had been pretty irresponsible with it. It was full of sand, crumbs, and hair. SO, I took the iBook completely apart for a good cleaning, and the ideas began from there. I decided to keep the iBook, and see if I could make it faster, better and ended up with something incredibly cool. I really wanted to breathe new, OS X-running life into it. I wanted it to run OS X well, or at least well enough for word processing, web-surfing, and watching DVD video via a X app or two ( mentioned at the end of the process... and 400mhz is really where you want to be when you don't have GPU DVD decoding ). I spent between three-and-a-half and four hours to complete everything for this modification. It was important to take my time, as it is anytime a soldering iron and Dremel are involved. Thanks to taking my time, I didn't run into any real difficulties, though I should mention this type of work requires a fairly high level of skill and craftmsnaship to start with. It's probably a good project for those who have tinkered with macs before and want to get inside a Mac laptop.
First, Take the iBook Completely Apart

There
are already several comprehensive guides on the internet with
procedures for pulling apart the Clamshell iBook, so there's no need to
repeat it here.
I
took mine apart without the use of a manual, and I think anyone with
experience and patience is capable of the same. The most important
tools for any successful mod are patience and even just a little confidence!
You'll want to go ahead take it completely
apart, to get at the metal lining along the inside of the plastics.
This includes the screen assembly, and also enables you to perform all
the following mods in one sitting, if you wish.
Here is a picture of the plastics with the metal lining removed:
Notice
the blue towel? I used a towel to protect the plastics from damage. I
wouldn't recommend it for working with the electrical components,
though ;)
Take your
time removing the lining. You'll need some of it later, for the backlit
logo. Specifically, you'll need the lining from the lid, especially if
it has an Apple logo cutout, which is covered with some mylar tape.
Remove
the tape, then use your dremel to slightly enlarge the logo, just
slightly larger than the clear colour logo. This will create the white
"halo" around the glowing coloured logo, when finished.

Afterword,
as shown in the photo above, you will cut the metal down to a
rectangular stencil, just slightly smaller than the LCD assembly,
being mindful that you want the logo to be
centered directly beneath the coloured logo of the iBook's plastic lid.
Tracing the LCD is probably the best way to determine the correct size, and you may have to play around with centering the logo.
Cutting the metal can be done with an exacto. The metal isn't thick or very rigid.
As you may
notice, I cut mine a bit too small ( above photo ), not to mention off-center with the
logo, and that's okay. If you make the same mistake, you can retrim
and/ or tape another strip of the lining to get to the proper size. So
long as you keep your tape facing the inside ( the side against the
backlight ), it will not be visible when the machine is reassembled, so
no worries.
You'll also need to cut a logo ( sort of ) from the support ( the perforated metal ) on the back of the lcd assembly. See Below:
I also, using the exacto, trimmed some white plastic that was on the
back of the backlight, to allow more light to pass unhindered. This was
very delicate work, and should be done slowly, making complete, light
passes over the white plastic, until you've cut the entire way through.
If it makes it easier, you can always place a thin sheet of cardboard
between the backlight and this plastic. You should only cut off enough
for the logo, using the logo you've cut in the perforated support as your guide.
And there I am ( above ), inserting my backlight stencil. Notice, I'm placing it between the backlight and the support.
You can now reassemble the iBook's lid.
Here's
a quick look at what the LCD looks like when together, with the stencil
between the support and the backlight. Notice, you don't see any
tape, or any backlight, for that matter. You want only enough light to
pass through for the logo.

On to the overclocking: 300mhz just doesn't cut it, anymore, for much of anything. I tried 433,
and it ran well, until I cleared the PRAM, and then it couldn't find
the startup partition, no matter what I did!
*SIGH*
So, 400mhz was the limit, for me.
See the processor? It's the purple G3 thingie.
A bit closer... and an accurate diagram of the resistors which set the CPU to Bus speed ratio:

To
reconfigure the CPU speed, resistors need to be moved either up or down
into a new position. It's fairly simple. Soldering, on the other hand,
takes time and patience. I did some experimenting with my 'Books various PLL configurations, including the aforementioned 433mhz, so it's not the cleanest job I've done, but it works.
That's when I pulled out the digital multimeter and tested my connections.
If it's not pretty, but it works, then it's done!

**Author's Edit: Sorry, folks... the 400mhz option should note a "x6" multiplier, not "x4.5"**
As shown in the diagram, only two resistors need to be moved to achieve 400mhz:
Position R8 moves UP to R7
Position R11 moves DOWN to R12
SLOWLY
heat and GENTLY move each end of the resistor, until it comes off the
board, and move it to it's new position. There should be enough solder
already present on the board that you don't need your own. However, use
it if you must, and if you lose a resistor, you can replace it with a
dab of solder to make a connection. It's preferable to use the
resistor, though.
For The Hard Drive
So
I found a 5400rpm, 60Gb IBM travelstar hard drive, with a 2mb cache for
$50. It was 12.5mm... too thick for a stock Clamshell... but too cheap
not to afford!
And besides, it was a fine excuse for more Dremel handy-work :D
Probably the best thing to do first is modifiy the drive cage, using the Dremel.

And
in the photo above you can see me holding one of the tabs, from atop
the cage, which secures 9.5mm hard drives and the stock 8.4mm hard
drive to the logic board, essentially by pinning it down. Now, as can
be seen in the next photo, drives are bolted to the cage, which already
provides the dropouts for the bolts. You may also notice how thick the
12.5mm drive really is!

Next, we cut space for the hard drive from the EM shield. Tin snips may
be best for this task, though the Dremel will also work. Save the
thermal pad on the underside of the shield, as you'll need it for the
keyboard.

You'll also need to remove some lip from the palmrest. Don't worry, the keyboard tab will still fit without moving :-)

The thermal pad, now on the bottom of the keyboard, above the hard drive:

Now, you're ready to put it all back together. Here's a photo of what things will look like when you're done:

And Another...
What about that trackpad?
Pretty simple, really.
Use your
exacto to pry up the edge of the silver/grey trackpad cover, and peel
it off. Use a vinyl eraser or similar to remove any excess glue, then
clean the surface with a damp cloth. After that, you can cover it with
some clear packing tape, then gently buff the surface with the fine
grit sanding paper. As a matter of fact, the buffing is pretty
essential for smooth finger movement.
Now, you're done!
You'll
find, with the new processor speed, and a good amount of RAM, your
iBook will decently run Panther and play DVD video, using Video Lan
Client or MPlayer. You can use the ethernet port to copy uncompressed
video from a DVD you own to your iBook, or replace the CDROM with a
DVDROM or combo drive, now that you know how to take the machine apart.
The first method, however, will save precious battery life for those
longer flights ;-)
Enjoy!