A thread on the Apple Discussions boards chronicles one user's problems with installing Mac OS X 10.3 on an iBook/466 clamshell.
" It seemed to go fine but after exiting the installer ended up with a blue screen with the white bar across the top flashing off and on every few seconds. Reboot and I get the same thing. Did another install (choose archive and install rather than upgrade this time). Same thing. The interesting thing though is pressing the power button results in a black box popping up. Clicking on the lower left results in a reboot, lower right just shuts down (little startup/shutdown circle shows up and the lower center of the screen) and powers off. So it seems like Panther is working but not drawing the display properly[ ...] Disabled auto login, now after booting I get the blue screen with a white window that looks like it should be the login window (but nothing in the window). Clicking about where a user icon would be results in the window resizing (like it's prompting for a password), but again nothing in it. "
Knowledge Base article #86624, referenced in the thread, notes "The display contrast may be high on some early iBook computers when running Mac OS X 10.3 or 10.3.1 or when started up from the Mac OS X 10.3 Install CD. The display could be described as looking 'washed out' or the text as looking 'blocky" (not smoothed.'"
Apparently, this issue is non-existent under Mac OS X 10.3.2, and the initial user was able to resolve the problem by connecting another Mac via FireWire target disk mode, and installing the Mac OS X 10.3.2 updater from the second machine.