I have a USB 2.0 -> IDE case, into which I've put a hard drive and a CD Burner as required.
It's worked fine with my iMac DV (400MHz, DVD ROM). I'm pretty sure that my old iMac has only USB 1.1 so I'd say that the 2.0 will 'downshift' to work with the older hardware.
I don't know if it works with OS 9, but with 10.3.2 (and 10.1.5 before) the USB 2.0 worked fine for me on the iMac.