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The iBook does not support using an external monitor in closed-lid mode. Only the PowerBooks can operate in closed-lid mode.

The iBook only supports using an external monitor to mirror what's displayed on the built-in screen.

http://docs.info.apple.com/article.html?artnum=88199

If you really want to do this, you're doing so at the risk of permanently damaging the iBook. There are hacks to help you do this, but I do not recommend them.

http://home.earthlink.net/~mrob/pub/ibook.html
 
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