I'd recommend you put more ram in there.. Get a 256mb chip at least.. Preferably a 512mb chip..
Other than that tho, your iBook should be fine. My iSight cam works just fine on my iBook 600 with 384mb of ram. Although iChat AV is a serious CPU hog, and my iBooks CPU is pretty much maxed outat well over 90% while using iChat AV.. But, it does work. So I am sure it will for you also.
Plus of course the iSight cam can be used in other AV/VC apps with no problems. It isnt just for iChat AV.