I have a G3/600 iBook and I think that 128MB RAM would be very limiting, if it can be done at all running OS X. I have relatively small applications running as I type this, and I am using 153MB of RAM.
Memory installation is pretty easy...just make sure to seat it correctly. If it isn't just right, the new RAM won't show up as installed. It took me several tries the first time I installed RAM before I got it right.
I would also be sure to get RAM from a reputable source; I had to get three RAM modules before I had one without defects.