After much research, testing, and verification.....I finally answered the ibook deep sleep issue.
First: the problem and symptoms.
The ibook is used in a normal environment, and the system works normal. The machine is then put to sleep, either manually or by closing the screen. After at least one minute of sleep, the screen is lifted and the screen is either black, a generic 5 language "you must restart your computer" window is displayed, or a kernel dump pukes across the screen.
THE SOLUTION:
It is a difficult problem to resolve....because I needed 3 ibooks to figure it out. Many people have pointed to the power management of OS X, and in some cases this is true. For most cases, however, resetting the PRAM and the power management does not resolve the issue. The problem is memory. The ibook seems to be quite picky about the type of memory that is used, and it makes sense when you think about how the OS communicates to the memory. The specific issue lies in a portion of the memory called the SPD, or the Serial Presence Detect. Supermicro defines the function of the SPD as follows:
"The SPD device is an 8-pin serial EEPROM chip that stores information on the DIMM modules' size, speed, voltage, drive strength, and number of row and column addresses. When the BIOS reads these parameters during the POST routine, it automatically adjusts values in the BIOS Chipset section for maximum reliability and performance."
The DRAM timing is crucial to system stability. It makes sense that any issues that occur would be prevalent in power management, because of the high level of memory intensive and multithreading interactions that occur on wake. The quality of the memory...in particular...the SPD EEPROM on the memory is a major contributor to this issue. If you have this problem, and the resets don't work....it's time to take a closer look at your memory. I did, and it worked. My memory was ibook spec...but it appears the SPD might have been damaged or affected by ESD. I removed the 512 and put in a Samsung chip 256....and my machine can now sleep with no problems. Hope this helps the ibook community.