bperkins - Everything stored on your C: drive in VPC is actually stored in a document called (DISKNAME).vp6. The Diskname is what you called it and it should be either in your Documents folder or whereever you placed the file. But since you CCC'd your hard drive, don't worry, as from the Mac side, your VPC hard drive is just another document like a text document. (Though a wee bit bigger). No worries for you.
psxndc - The short: You should.
The long: The performance of VPC is very much proportional to processor speed and amount of L3 cache. Having an L3 Cache increases the speed immensely (your iBook does not have L3 Cache). You can emulate now if you want, but don't expect it to be a 2.0 Ghz P4, more like about 1/3 of your processor speed at a Pentium II. That and with a really crappy video card.