My second Mac is a clamshell iBook SE (graphite). 366 mhz, 384 of ram, 6GB HD and it still works like a champ (have latest build of Panther).
I used it daily for a week when my G4 iBook had to go into the shop and my G/F uses it daily for surfing, e-mail and even Office 2004 work (I had an academic version so I was able to install it on both Macs).
About the only problem I've ever had with it was that I needed to replace the original battery.