You can verify using the copy of DU on your internal drive. You can't run repair though. The objective is to see if starting in Safe Mode did anything to help. You could even restart normally to check that.
I don't know exactly what the error means but reading some of the links I recommended suggest it is a must-fix. I don't know the cause of it. Just having Retrospect installed probably doesn't mean it caused it. It is possible Retrospect may be causing other problems but I don't really know much about it.
The directory on your computer keeps track of all your files. It is a kind of master catalog of what is on your drive and where all the bits and pieces are located. Once it starts going bad there is danger of losing files and of the computer crashing if something critical in the system gets accidentally overwritten because the computer thinks that space is free. The thing is, your computer may already have started losing track of your files, but with the hundreds of thousands of files on modern computers it is hard to test each one. You can back up to an external drive right now and hope that not much has happened or nothing irreplaceable has been erased. A Powerbook isn't the best way to do this because the best way involves copying 100% of your files which requires an empty destination drive.
If you must use the Powerbook then start the bad computer in Target Disk Mode. Connect it to the Powerbook with the Firewire cable and copy off your data files, realizing that some may be damaged already but you won't know it unless it happens to give a copy error.
[How to use FireWire target disk mode|http://support.apple.com/kb/HT1661] - includes description of hardware and software requirements.
Once you have done that and you decide not to try Diskwarrior then the only way to repair the drive is to simply erase the whole thing. Note that all your user settings and everything will be erased. You'll need to boot to your installer disk and use Disk Utility to erase the drive, formatting it to Mac extended. It might be worth doing a secure erase with write zeros once because this does an addditional drive check (but takes longer). After erasing you can re-install the operating system, and do updates. To get straight to 10.4.11 you can use the combination updater which does it in one step.
[PowerPC-based Macs|http://www.apple.com/support/downloads/macosx10411comboupdateppc.html]
[Intel Macs|http://www.apple.com/support/downloads/macosx10411comboupdateintel.html].
[About the Mac OS X 10.4.11 Update|http://support.apple.com/kb/TA24901?viewlocale=en_US]
There will probably be a whole bunch of Java updates which you have to do one by one. You can use Software Update to see what needs to be updated.
You can then go back into Target Disk Mode and copy your data files back on, keeping your fingers crossed they are intact.