My experience is 10.1-10.2, sorry no Panther.
When you enter a public folder password in the iDisk system preferences/internet panel, you must also click "Apply Now" for it to have effect.
To connect to the public iDisk, you use Finder's Connect-to-server and enter
http://idisk.mac.com/username-Public, and when prompted for a password, enter user name "public" and the public folder password. (You can also access another user's iDisk public folder from the Address Book if you have the iDisk user's name and .mac email address in the Address Book.)
From 10.3 I've read that you have a "Other User's Public folder" as a sub-menu to iDisk on the Go menu.