I'm using an iBook 900 (640 mg/ 40 g) with 10.2.8 with Netscape 7.1, Word X, Now Up-to-Date and Contact 4.5.1, and the latest Appleworks as the key programs I cannot afford not to work.
My suggestion would be to use Carbon Copy Cloner to make a bootable backup of your drive, and then do either a clean install or an archive and install. Upgrading your OS w/o a backup to go back to is asking for trouble IMHO. Most of the issues I have heard from people have been due to either using some sort of haxie on their system, or from performing an upgrade.
I did a clean install on my 17" PowerBook after making a backup and I have had no problems.
Steve Fuller
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