On both the first-gen (867 MHz) 12" PowerBook G4 and the first-gen (2.0 GHz Core Duo) MacBook Pro, it is an advertised feature to work in "lid-closed" mode. On both, there is a requirement of having something plugged into the monitor-out, and being plugged into wall power. In addition, you need some way to wake the computer up, since both machines go to sleep when the lid is closed.

On the PowerBook, a USB or Bluetooth keyboard and/or mouse works fine. On the MacBook Pro, a USB or Bluetooth keyboard and/or mouse, or the infrared Apple Remote will do the job. Obviously, for both machines, to use Bluetooth to wake it up, you have to have "Allow Bluetooth devices to wake this computer" checked in the Bluetooth System Preference pane.

I know that the entire run of G3 iBooks cannot be run in lid-closed mode without a software hack. Not positive about the G4 iBooks.