It sounds like the hard drive has quit. I had the same thing happen to my G4 and took it to the Apple store today. They checked it out and said that the hard drive was gone. They told me that I could have it replaced by them for about $300 with a 90 day warranty. If you can replace it yourself, you can get a new drive a lot cheeper.
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Blinking ? mark folder means that your OS can't be found. Take out your RAM underneath the keyboard and re-insert and try again. Nothing? Install a different new RAM chip and try again. Nothing? Install your disc 1 install disc, power down, wait a few seconds, now press the power button to turn on, now press and hold the option button, until your disc 1 shows up, select it, and bring your pointer to the right arrow on the screen and press enter. Now your booting from the disc 1. Go to disc utility folder at the top of the screen and select your hard drive and then select repair disc permissions. Then shut down and reboot when finished. Nothing? Your hard drive is fu.k.d-Try re-installing the OS. Nothing? Your hard drive is really fu.k.d-You need a new hard drive. Installing a new hard drive in the iBook is a *****. You may want to pay someone to install a hard drive or you can just get a new laptop.
If you external DVD drive connects via USB, try rebooting your iBook. (Sometimes a static shock will shut down your USB channel, and only a reboot will reset it.)
If this doesn't work, choose "About This Mac" under the Apple menu, then click on "More Info." Under Hardware, click on USB. See if the drive shows up as one of the attached USB devices. If it does not, the drive or cable may be bad.
If you have another computer available, connect your DVD drive to it. This will tell you whether the drive has failed.
Before disassembling the unit, the recommended way to diagnose a display failure is to use the appropriate adapter to connect the iBook to an external display or TV. If the external display shows an image, the internal display assembly is at fault; otherwise, it could be the graphics processor or logic board. This step may be more difficult now that you have your unit apart.
Two cable sets drive the display. One provides image signal, the other provides power to the backlight. It is common for them to fray where they run through the hinges. Either or both could be the cause of your problem. Another possibility is that your backlight has burned out, as it is nothing but a small fluorescent tube and they fail with age.
Sounds like your hard drive is failing.
Try booting while holding down the shift key that will put you into safe mode and run some diagnostics at the same time.
If you have the discs that came with the laptop try booting from them while holding down the D key. That will bring up AHT a built in test for your mac. You can use it to test and repair some of the disc problems you are describing.
I think the first thing you should do is make all updates. I know that in some versions of the iBook G4, the trackpad does not work after installing OS X 10.4 (Tiger) before you do the updates. Update your OS X first. secondly, does the button work? Does the trackpad show up in the System Preferences menu? (under keyboard and mouse). It's very unlikely that the trackpad came unhooked unless someone has opened up your computer. If they have, there is a really good chance that they didn't plug it back in, because it's a hassle and easy to forget.
If you are getting a blue screen, you computer has loaded into the User files, you user files are corrupted and are causing this problem. Having a known good drive to start off of, you can fix this problem rather easily.
Hi If you are still faced with this problem..... Possibly the video card has gone in the unit. The original screen on the laptop may have had an blown inverter which would not stop the funcioning of the external display. However for the external disply to stop working would suggest the video card. Before going this far have you checked to see if there is power to the external monitor? Have you tried the monitor on another computer? If the monitor works with another computer you can be certain there is more wrong with your poor old iBook. You will need to take it in to be looked at.