I am using the 17" with no problems, but is is an entirely different display card. I think you should consider getting the 15" instead of the 12". Even if the card works with AC, the 64MB of VRAM will give you much better performance than the 32MB in the 12". (I know, the little guy is just so cute )
If price is the issue ($400 to $800 more depending on the model) you might want to check CompUSA. When I bought my PowerBook they were offering 18 months to pay with no interest, which at the usurious credit card rates represents about an $800 savings. Of course you have to keep up the payments and be sure to pay it off before the deadline or you'll get whacked with the full tab.