Okay, I finally got the demo to go! It does appear to be related to the video drivers. I think the following actions were the key:
1) In Extension Mgr, disabled "ATI Video Software Update 1.0", which includes:
- ATI 3D Accelerator, v. 4.6.2
- ATI Graphics Accelerator, v. 3.9.7
- ATI Resource Manager, v. 1.2.4
2) Removed "ATI Driver Update 1.4.8" from the extensions folder. Replaced it with "ATI Driver Update 1.4.7", downloaded from Apple.
I tried (2) without (1), and (1) without (2), but neither worked. Only both together. Also in the working setup:
3) Assigned 51 MB of RAM to CM
4) Disabled backside cache
5) Virtual memory on: 192 MB physical RAM, 58 MB virtual RAM
6) Most extensions disabled, but among others I reenabled the following and CM still works:
- Quicktime 4.0.1 and 4.1.2 packages
- Microsoft OLE 2.2 package
- Microsoft Internet 5 package
- Microsoft Visual C++ 4.0b package
- Kensington Mouseworks package
- FireWire Install 2.3.3 package, and
- FireWire VST OHCI Enabler
(The last two being for my VST FireWire external drive and Newer Technologies CardBus FireWire card)
I haven't yet isolated which of items 3-6 are absolutely necessary. Setting the resolution wasn't necessary -- I started CM up with the resolution at 1024x768, and it reset it to 640x480 by itself.
The upshot seems to be that CM doesn't work with the most recent ATI driver update for PowerBook G3's, but does with the previous version.
Many thanks to all of you for your suggestions and help!