I'm not sure about early powerbook G3s but I think it'll work on any G3. Someone correct me if I'm wrong. People have got it working on beige G3 so it should be fine.
Apple is using a rev. B iMac 233 as its OSX benchmark system. Their goal is to get it working well on that system. As your computer is faster, you should be right. 128 MB is what apple is quoting as the recommended RAM but we recently upgraded from the standard 128MB to 256MB and i noticed a significant speed up, especially with classic apps. But the extra RAM is icing on the cake, your system is fine.