Hi again,
With the G3,G4,G5 PowerPC chips you can only boot with Firewire. It would take an Intel Mac (the newest ones out now) to be able to use the USB to do that, the older "G" series Mac's are limited to Firewire.
You can still make a clone/backup to the Passport Drive, but it would not be able to Boot or run the 10.3.9 on it... it would become more-or-less a DATA Drive. It depends on what you want to do; what you want to have as back-up; what security net you like; and if all else fails, what can you go back to; and if it works well, what you want to take with you on the move to Tiger.
A full working clone is the optimum choice, nothing lost. A full Data Back-up is nice in the 'transition' from one OSX to the next OSX, you do not have to start over from scratch... and not much down-time. If you did an Upgrade to Tiger (from Panther), most all of your settings and such will transfer to it. But do note, not all are compatible between the two OS's so some will have to be added from your old Panther to the way the new Tiger does it, even with an upgrade. The Archive and Install option also means moving certain files over from the old Panther. So the easy way is to clone and have a system that boots from Panther, while you then do an Upgrade to Tiger on your internal drive... most all goes with it in this process. The working Clone is a 'Just In Case' thing... say Tiger fails for some reason, you then have no Tiger, and no Fall Back to Panther if you do not have a Working clone. And yes, if you look at the Tiger Forum, things can go wrong. Better to be able to 'continue on' then to be without anything till something gets fixed. You could with the Panther Clone, even get back onto this Support discussion and ask for help, otherwise it would have to be another computer you use. Usually things work fine, but...
It's up to you, is a Firewire Drive worth the ???. And you can always use it otherwise, as most come with both USB and Firewire... And you only need one about as big as your internal one, but with cost per Gig, a little bigger is sometimes cheaper and yes, you will eventually use it all.
Both the Cloning Programs can be had off VersionTracker... remember, get the version that will work on Panther, as that is what will be making the clone.