I've upgraded two beige boxes to G4's. One to G4 350 and the other to G4 400 Mhz.
For some reason it is very difficult to install OSX on these machines once the G4 zif is installed. It was also difficult to switch startup disk from OS 9 to OSX. I got around this by using XPost facto, but I can't explain why this should be necessary. If you don't switch back and forth between OS9 and X then this shouldn't be an ongoing problem.
The speed increase was underwhelming. The built in video on the Beige just won't cut it in OSX. The slow IDE controller is also a bottleneck.
I gave one to my father. He likes the OSX interface but he only uses it to browse the web and send email, so the slow speed doesn't bother him. I have the other machine set up as my OSX test box, but I rarely use it since I find it unbearably slow.
The beige boxes are great in OS9 but just won't cut it in X unless you have low expectations. The G4 upgrade doesn't help as much since the rest of the hardware is limiting the improvement.
If you really want to use X then I would wait till the G4's at 800 Mhz or higher drop to a reasonable price on the used market. You may not have to wait long since the new G5's will put downward pressure on the used G4 market.
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My beige G3 333 is upgraded to a G4 500 from Sonnet, and running Jaguar. I had no problems with it. Except when I installed Sonnet's "Tune-Up" software. When I did that I had a lot of screw-ups. I finally ended up reinstalling OS 9 and Jaguar -- no tune-up -- and everything was fine again.
I got the G4 upgrade primarily for software that would be enhanced by it. For your purposes I would go with a G3 upgrade. You'll likely get more speed for less money.
You still have a lot of life left in that machine. If you're primarily using Photoshop and iTunes, you should be fine.
The G4 processor enchacnes the overall performance of Mac OS X, but certian applications, which take advantage of the G4 Velocity Engine, such as Photoshop 7, get great speed boosts from the G4 processor. Keep that in mind.
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