You can have a dual-boot setup with a Power Mac. NewWorld Power Macs (iMacs, B&W G3s, and up) use OpenFirmware. These Macs can use yaboot as the bootloader, allowing you to boot into Linux without having to load the Mac OS first. You could also make a NewWorld Power Mac a Linux only machine. However, older Power Macs up to the Beige G3 are considered OldWorld since they still use a hardware ROM and must have the Mac OS loaded (even if just partially) before you can load Linux. This is done through Boot-X which downs the Mac OS and boots it into Linux.
As for the different workspaces, they are pretty helpful. I separate my browsers and other applications depending on my work under different workspaces. Expose is Apple
s answer to something like this which I think is wonderful, and I know it will be implemented on KDE and Gnome soon (it's actually available for Gnome as a separate compilation, but I haven't tried it yet).
As for distributions, I prefer Yellow Dog Linux, but there is a version of Mandrake Linux for PPC. I don't normally recommend it since they tend to treat it a the ugly sister.
You might want to also give Gentoo or Debian for PowerPC a try also. But for an easy, RedHat-like Linux distro, Yellow Dog is where it's at.
As for running both at the same time, it is possible, but you would have to run an emulator to run the other operating system. For example, you could have Mac OS X installed and then use Virtual PC or something similar to run an x86 Linux distribution. You could also just install Linux (if your Mac is NewWorld-based) and run Mac-on-Linux which allows you to install run Mac OS 9/X, a-la Virtual PC. The latter is a good option only if you're machine runs sluggishly under OS X, but you still need to have some ability to run Mac apps. I wouldn't do that with a new G4 or G5.