Put your iBook in Target disk mode. Then shut down your macbook. Start up your macbook again and wait a little bit and it should come up.
I had the same problem with my iBook and iMac, it ended up if I restarted my iMac enough times, jiggled the firewire cable (which by the way, the first 2 I bought never worked - but on my 3rd one, it worked fine)
So I hoped that helps.