UPDATE: it seems to conflict with the other ATI drivers. Disabling them all made it work fine.
I have one of these powerbooks and I just set mine up following ahihi's instructions. The other ATI extensions do not stop my iBook from booting. Are you using the ibook G4 ATI extensions found here:
https://macos9lives.com/smforum/index.php?topic=4336.0 ? (I'm not sure if they are needed, but I seem to have installed them.)
I thought the crash after loading the first extension (What is that? Arrows pointing left and right is not very intuitive to me....) was due to a unsupported sound hardware, something called "screamer"?
In any case I had a very hard time editing nvramrc because nobody told me that nvedit was a cruddy line editor (yep, you can only see one line of the nvramrc at a time) and mine was completely borked with stair-stepping text and huge amounts of whitespace between words thanks to my clumsy attempts to copy paste the commands in reply #9 into nano (a text editor) and run as a shell script on OS X.
If you want to be able to make any sense of your nvramrc, I recommend you use nvedit directly one line at a time in open firmware.
I found the following info on how to get around nvedit at netbsd.org:
C-l refreshes the display
C-k deletes from the cursor to the end of that line of text
C-n moves to the next line of text
C-p moves to the previous line of text
C-f moves forward one character
C-b moves back one character
C-c exit the editor and store edited contents into a temporary buffer
note: this does not save the changes to the NVRAMRC, you still need to run nvstore