Yes, sleep works perfectly while traveling. I always put my PowerBook to sleep when I'm traveling and it has survived everything fine: Planes, trains, busses, cars, carrying, banging against other people, getting swung onto tables, etc.
Not a hitch.
A guy at our lab actually threw his 17" PowerBook from his desk onto the concrete floor (by accident of course) while it was sleeping. The PowerBook got a big dent and cracked, but when he opened the lid it came right back to life and worked fine.
We hooked it up to an external FW disk, backed up everything and ordered a replacement. While he was waiting for the replacement he used the PowerBook for another three days and everything went just fine.
Sleep rules.
