Compact Flash and some of the other cheaper forms of flash media (as opposed to NAND and whatever other forms of "real" solid state media) are theoretically (and I believe this has been more or less proven) good for an absolutely unlimited number of read cycles, but not so good in write-heavy environments. They last a long time when you write to the whole card once in awhile and then read out the data frequently (music players) or if you write-in then read-out most or all of the card sequentially (cameras) and should hypothetically be good with data you need to write then maybe read a few times (installers, archives) but aren't necessarily good when you're going to rewrite a portion of the filesystem over and over again, repeatedly (swapfiles.)
TL;DR version is that it should work well but you might want to get more ram and run with virtual memory disabled.
The biggest thing I'd say is that unless you put a lot of money into it, CF cards in reasonable capacities are actually very slow. We replaced my girlfriend's iPod (80gb 5.5 gen) hard disk with a CF card and she almost immediately noticed how much slower it was loading new files into the device than the hard disk or the previous iPod she'd had (20 or 30gb iPod 4th gen.) Once the media was on there, the CF was fast enough to keep up with playing back songs and videos. I don't know how this compares with some of the hard disks that shipped in laptops in, say, 1999 or earlier. The further back you go, the less it'll matter, of course, but it may be noticeable in a G3, especially one that's lower on memory in such a way that you can't really disable virtual memory. (Or where you want to run some higher-performance OS 9 apps, although that may be a slightly inappropriate use of an iBook anyway, so who knows.)
As another data point/observation: I have two of the slowest available 32gb CF cards you can buy. The first was for that iPod I mentioned above, and the second was for my dSLR, because my camera has a huuuuuge buffer, so I've never noticed how slow the card is. I'm pretty sure both times the card was between $50 and $70. Once I bought from newegg and the other was either newegg or ebay. You can get a faster card than that by going for 4 or 8gb and then moving up a speed teir or three.
