The hard drive is under the left palmrest, which is why it commonly heats up. The processor is near the vents by the screen hinge.
1) The hinge design lowers the screen as it angles back, so it won't go back as far as a Pismo (which, IIRC, could go nearly flat).
2) Not sure how it compares to a Pismo, but the iBook screens are relatively high quality.
Hope this helps!