External drives should generally match the vintage of the software you're using. While there are standards in place regarding protocols and whatnot that the software and drive use to communicate, sometimes it changes enough to where there will be problems. Disc standards can change too. A big concern with some drives are with CD-RWs and high-speed discs: older drives, such as the USB Sony CRX-10U that I used to use with my blueberry iBook in the early '00s (great drive at the time, btw: compact 4x4x6x drive, usable as standalone MP3 CD player, powered via either AC adapter or LiIon battery pack), will not touch CD-RWs that are rated higher than 4x. Really frustrating especially when low-speed discs quit being readily available. But yeah if you're using Toast 6, for example, you're going to want a drive that was built around 2000-2003ish; anything newer may not work correctly or with the newest media.
The only bad thing about using the internal drive in the dual-USB iBook G3 is that its hard drive and CD drive share the same ATA bus, which can result in BURN errors if you try to burn too quickly. The later iBook G4s had independent buses so this wasn't as much of a problem on them. But with the G3 models, if I want to burn quickly, I usually use an external FW drive instead.
The dual-USB iBook was built around 2002, so mostly Sony, Pioneer, Matsushita/Panasonic, and Toshiba were OEMs for Apple at the time. TEAC, LG, HItachi, maybe Lite-On and some others also supplied drives off and on over the years. Matsushita/Panasonic has been supplying optical drives to Apple continuously since the first tray-loading drives in about 1993 so they're usually a safe bet for compatibility with Apple's own programs such as iTunes or Disc Burner. It can be hard to tell what's in an external enclosure, but my primary recommendation for drive mechanisms is Pioneer; kinda hard to go wrong with them. LG hasn't been bad either, in my experience. Matsushita/Panasonic drives are better if you want caddy-style DVDRAM support and they're usually pretty reliable though most need their load belts replaced by now. Avoid Toshiba Samsung/TSST and newer Sony/NEC/Optiarc drives though because they're crap.