I'm not sure if it's the same, but I Installed 512MB memory into my 12" 867 Powerbook and had to remove a single 128MB stick( the PB came w/ 256MB).
I did not see the other 128MB stick, so I'm assuming that its built in or something like that. If that's the case, then you might not have to discard any memory and
your ibook will have 640MB.