First of all, what field will you be studying. If it is something in the humanities that could affect my advice, if it is a science I would probably recommend something with a little more power, and a social science could go either way.
That being said, I will recommend getting the the 2.0 white MacBook. The processor is a little faster than the base model, but it also comes with the super drive. The DVD burner will come in handy if you need to backup large amounts of information, or if you need to burn stuff for presentations that include video.
I will also highly recommend getting a stand alone display for your desk, and a regular keyboard and mouse for he same. You will be writing a tremendous amount, and the extra display can give you the space as a second display, I don't believe the iBook gives you that option, and a regular keyboard and mouse will be way more comfortable to use. The extra screen space is a necessity for writing papers, you will want a couple things open as you write on a third.
The MacBook will also give you the ability to put windows on it, should you need to, and that is better than trying to find time to go to the school computer lab.
Here is something I will recommend as well, bump up your RAM to 2 GB, and replace the Hard Drive with a large 120 GB or 160 GB. Buy both from an online vendor like OWC. Before you replace your Hard Drive, Format the original with everything that you need, then replace it. If anything happens to the new one, when you send it in you will have a backup that is ready to go, and you will save yourself hours off time when you need to be working on a paper (believe me I know). Make sure to back up all your work and resources as you go along, so you can just drag them into the replacement HD when the time comes.
I know some of the things I recommend will add cost to your purchase, but you will see that they will make great sense as you get to working. You will want as little hassle from your computer as possible when you need to get work done. If you can, buy a second battery and a second power adaptor. Keep them both in your bag, and they will surely come in handy.