Just mount it with Toast on the iBook.

From what I read .toast is pretty much the same as .ISO.
Your iBook has no clue what to do with such files.
If you want to read the contents of a .toast file with your CD drive, you should burn the image to a CD instead of copying it to one.
Mounting the file is a possibility of course, too:
http://www.macintoshgarden.org/apps/virtual-dvd-romcd-utility
does the mounting without needing much resources.

For the burning job, what OS´s do you have?

Sounds as if you've forgotten to check the settings for Classic in Toast.
Depending on the version of Toast you are using, it may have different names and location in Preferences.
For instance in Toast 10 it's "Show legacy formats and settings".

Err,

1. Lock the Toast file in the Finder, if it's not already locked.
2. Start up Toast, v7 in your case.
3. Select the "Copy" tab.
4. Select "Image File" in the left pane.
5. Either drag the toast file to the main window (where it says "Drag a disc image into this area", or click the "Select ..." button and choose the toast file in the file browser popup.
6. Click the big button to burn.

I never burn CD's. Many older CD-ROM drives won't even recognize CDR's, or will take so long as to render them useless. This problem will only get worse over time as machines age and anything with moving parts, like CD-ROM drives, will be the first things to break. Better to have large capacity hard drives and some means of moving big files around, like Compact Flash cards used with USB or PC Card adapters. That way you can store Toast images and mount them without ever using the CD-ROM drive.

Burning is fine if you have a large piece of software or a boot CD, but for general file shuffling it's just easier in the long run to have a network file sharing system.

Often the problem with burned CDs isn't the media itself but the speed you burn at. I had to make a replacement copy of the OS 7.5 install CD, and it worked in a StarMax 4000, Quadra 650, and Powerbook 1400. 2x seems to work properly in just about everything, and in my experience if the drive can read the disc faster than that it will.

I just rename the file from something.toast to something.iso, then burn it at a low speed using ImgBurn.

Like MCP says, a green 2TB disk wilol cost you about $120, and it'll hold the same as 500 DVD-R or 3500 CD-Rs. Do the maths and also consider the space requirements.

But even I (with 14TB of disk) still need the odd CD-R or DVD-R, only when they are needed to play while I don't have a no-cd patch. SpiderMan-2 is the latest for my son to play - am I going to put the original disc into my PBG4 for him to use ? or in my PMG5 / MacPro for him to tease his little sister pressing the eject button to open and close the tray before she can grab it ? Of course not.