I purchased an iBook g4 a few weeks ago, so far no problems at all. Some older games run slow when I have an external monitor connected and monitor spanning enabled (which requires modifying the system because you're not supposed to do that on the new ibooks) but strangely enough the newer more graphic intensive games which i have downloaded the demos for have no speed decrease at all when monitor spanning is enabled, very peculiar. Generally speaking, however, I only use the computer for internet, word processing, and music. It works great. As for heat, it gets a little warm but nothing I can't bear, although I have yet to wear shorts while using the laptop (as it is very cold outside during the winter), but i can see that being a minor problem. I primarily use the laptop on a desk with an external mouse and keyboard, so I haven't really had to deal with the temperature too much, but when i have used it on my lap it wasn't a problem. Originally i was looking at the 12" ibook as well but then i saw how small it actually was and decided it was worth it to buy teh 14" instead, which i currently have.
iBook g4 933 mhz
256mb Ram (soon to be upgraded to 640 mb)
Combo drive (very nice)
Internal bluetooth module (in use with wireless keyboard and mouse)
If you ask me, I would say definitely go for the iBook g4, and I would recommend going with the 14" screen if at all possible. I would suggest taking a look at them at a local store of some sort. Good luck!