It works with 10.4, so presumably it will work with 10.3.9. It won't utilise USB 2 speed, again it should still work.
I wouldn't particularly recommend the camera, it does take decent pictures, though in less than perfect light conditions the autofocus is rubbish, the software is truly awful (tried it, deleted it), it does work with iPhoto and image capture, but I find it very sluggish, whether this is the camera or the XD memory card I don't know?