To move the menu bar, go into System Preferences, go into Displays, and after detecting the second display, you should see a tab called "Arrange". You use this both to move the two displays relative to each other, and you can drag the little tiny menu bar from one screen to another.
The dock will always go under the menu bar. (If you arrange the displays to be vertically stacked, then the dock won't be on the same screen, but on the lowest one.)
The PowerBook will always go to sleep when you close the lid. You can't change that. But what you do is just wake it up with the lid closed and the external display connected. (Note: you must be plugged in for this to work!)
You can wake it up by pressing a key on the keyboard, or connecting another USB device.
tooki