if you want to upgrade your Clamshell, a 512MB RAM stick instead of the old ( probably defective) 256MB would be a great choice.
If the bad RAM message booting OS9 shows up, the RAM stick or the onboard RAM has a failure. When the message vanishes after pulling out the ram stick it is more likely that the onboard ram is OK.
If you have a firewire iBook you may run Apple Hardware test
CD image download to make sure your system is OK
http://www.info.apple.com/support/aht.html
When your iBook has already firmware 4.1.7 your up to date and there is no need to reflash.