You can use the Install and Restore discs to take it back to its original state.
You may want to do a secure erase, although it would take someone very sophisticated to regain any of your data once you've done the Restore of the system.
With any version of the software installed, you really need the Install disc of that version in order to perform maintenance on the hard drive with Disk Utility on the Install disc. You can't use an earlier version's Install disc's Disk Utility to repair a later version of the OS installed on your hard drive. Also, passing on an iBook with Leopard as the operating system, but no Leopard disc is a violation of Apple's license for Leopard, since, presumably, the Leopard disc and the software it contains exists on at least one other Mac somewhere.
This License allows you to install, use and run one (1) copy of the Apple Software on a single Apple-labeled computer at a time. You agree not to install, use or run the Apple Software on any non-Apple-labeled computer, or to enable others to do so. This License does not allow the Apple Software to exist on more than one computer at a time, and you may not make the Apple Software available over a network where it could be used by multiple computers at the same time.
Anytime a Mac is sold or given away, the original system discs and the discs for the operating system it's running at the time it is resold or given away should be included in the transfer of the computer.
That said, you could create a new user, being sure to give the new user administrative privileges. Then you can log out, log in as the new user, and delete your account.
This is not a very secure way to do this, but it is most likely sufficient for your purposes.