Boot from USB iBook G4 Power PC
I know this old, but I just solved this problem, and I had found this question while searching for an answer. 

In my case, 2005 iBook wouldn't recognise the 10.5 install DVD. I imaged the DVD to an 8GB usb stick in Disk Utility. I did format the USB stick as Apple Partition Map first in case that makes a difference.

It wouldn't boot from the USB when holding down option or C though I could get a menu.

I booted to open firmware by booting with command+option+O+F
then I ran the following command:
boot usb0/disk@1:3,\\:tbxi

It booted into the installer and everything worked as expected.