I played a little (10 hours) of WoW on the previous model ibook,
which has an ATI 9200. It was not smooth, but I found
it playable (if you're used to high frame rates on a PC
then you might notice more than me).
This was a while ago, before the WoW patch, and the OSX patch
that supposedly improved performance noticably.
The new ibook has a 9550, which I believe should help performance noticably.
It still has "only" 32MB VRAM, 64MB would obviously be better,
but I wouldn't say it's crippled considering the price of the ibook.
Hope that helps a little.
Edit: I would agree that the powerbook should give much better performance for games.