You do not have to turn off the nat if you do not use the WAN port and DHCP is off. I did a little reading and from what I can tell you have to turn in internet sharing for a modem after you have connected to your ISP. Not sure if this is still true but something to keep in mind none the less.
On your iBook go to System Preferences => Network, show the Airport. Under the TCP/IP tab for the Airport what does it have for IP address and Router? Does the value for Router match the IP address for the Ethernet on the G5? If not what are the values for the built in ethernet on the G5?
Since you are able to ping the G5 you are at least communicating between the IBook and the G5. The fact that you had DHCP active on your Access Point was possibly part of the problem. When you are doing internet sharing from a Mac the port from which the MAC is sharing hosts a DHCP server. So at least for a while you had 2 DHCP servers hosting IPs at the same time which would lead to some trouble,
What we are trying to get to is for the router entry on your iBook to be the address of the ethernet on the G5. If the router does not match try clicking "Renew DHCP Lease" on the iBook and see if it corrects itself now that the WAP is not giving out addresses.
Depending on what the values are what we might try next is setting up a static IP on the iBook for debugging purposes to see if you can route out then.