There is a fair chance the older first edition dualUSB ported white iBook G3/G4 group
does not support larger capacity hard drives; you also may need to check the format
to see if the unit shipped with one that isn't compatible with old OS X or OS9.2.2 files.
http://lowendmac.com/2005/how-big-hard-drive-imac-emac-power-mac-powerbook-ibook /
External use of larger capacity drives is a different area of concern than internal hard
disk drive usage; and not just size but type is also important when considering internal.
With an external drive, a new one supports USB2.0/3.0 and faster; the unit may not be
supported with USB1.1 that is as much as 40x slower in read-write. And if the unit is
not in a self-powered enclosure, that too will likely fail since port-power for a larger HDD
may be lacking from an old USB1.1 dualUSB computer. There likely is a mis-match in
hardware support. As details are lacking, one can go across a wide range of possibilities.
And older PowerPC macs tend to prefer their external drives be IDE/ATA (PATA) and be
inside a FireWire400 self-powered (not bus powered) enclosure; these also can support
bootable clones of the OSX if the controller chipset inside the enclosure is proper type.
An earlier chipset type was referred to as 'Oxford chipset' but there are other; see the
OWC macsales.com site for enclosures w/ their own power supplies, FireWire400/800.
So the kind & type of hard drive enclosure may also be an issue, in addition to the limits
in physical capacity of the drive and how it is attached to the computer... And power.
Good luck & happy computing! 🙂