When you boot from the installation media (live-CD), networking isn't active automatically. You'll have to visit the Network settings to make it connected.

How about if you do exactly like this:

1) Have an ethernet cable connected from a router/switch that's turned on to the iBook
2) Turn on or reboot the iBook (do this to make sure it detects the cable connection)
3) Open from the pull-down menu Settings -> System -> Network (default settings should be eth0/dynamic IP address, which should be fine and no need to touch anything, just open the prefs page)
4) Click the Use button to activate the network
5) Wait little and close the Preferences application window
6) Open the Shell and type "ping 8.8.8.8", does it report ms values or some errors?