You haven't said what your backup is. The other problem is that you have to have something in your iBook for it to run, either a hard drive or CD or something.

I would install the 320 in your firewire drive. Then connect your iBook and make a clone to the FW drive (Carbon Copy Cloner or Super Duper will do this). Then test the 320 by booting from it when it's in the external enclosure. Then shut down and put the 320 into the iBook and with some luck and perhaps a small sacrifice to Steve J maybe it will run. I've been able to do that in the past. You might need to have the old internal in the FW enclosure just in case you need to boot from it and perhaps run Disk Utility on the internal just to make sure it's working OK. Good luck.