When you partition a harddrive, you re-format it and all data on the drive are lost. Therefore, if you want to partition the harddrive in your iBook, you will want to save its contents to some other media, preferably an external harddrive. That is why Kevin recommended that you backup.
I recommend that you do some searching around to learn more about partitioning and backing up. For instance, there is a general overview of backing up here:
Backup and Recovery. There are a variety of apps available to help you back up. You can actually make a bootable clone of your harddrive with Disk Utility, as discussed here:
Creating a bootable clone with OS X Disk Utility. There are other apps which allow more flexibility. For instance, Carbon Copy Cloner allows you to make both bootable and non-bootable backups. The source is here:
Carbon Copy Cloner.
Regarding partitioning, Apple has a procedure here:
Partitioning a hard disk.
And, to boot from your install CD, insert the CD while the machine is running, select restart, and hold down the C key during the initial rebooting. When you hear the CD drive clicking away, you can let go of the C key.
Hope this helps.
