Happy isn't the issue here. The issue is that it's not my money, so Yes, you should upgrade! =)
I just got a new SuperDrive iMac at 800Mhz. I had a TiBook 500. I am very happy with the increase in performance. Of course, there I'm going from a mobile chip to a desktop chip. I don't know for certain, but I kind of assume that mobile G4's aren't the same as desktop G4's.
On the other hand, your new 800Mhz TiBook has 1MB of L2 or L3 cache, right? That may even beat my iMac.
Go for it!
And don't forget the bigger screen.
-Rob