Looking through this site, I found part of the solution in this hint. The trick was getting this script to activate on Sleep (or wake up). After some searching, I found Bernhard Baehr's excellent Sleepwatcher. Sleepwatcher is a daemon that calls a pair of scripts, ~/.sleep and ~/.wakeup, upon sleep and wakeup. Combining these two, I installed Sleepwatcher, and used the code below as my .sleep file (the /System... line is shown on two lines; enter it as one line without any added spaces):
#!/bin/sh
/System/Library/CoreServices/Menu\ Extras/User.menu/Contents/
Resources/CGSession -suspend
Restart, and your Mac will fast-user switch itself to the log in screen when you close the lid! Hope this helps other paranoid PowerBook owners! Note: You can also put this script in your .wakeup file, but there's a few (three to five) seconds' delay between wake and the script call, leaving the system wide open for a few seconds, and looking a bit tacky to boot.
[robg adds: I tested this one with our iBook, and it worked exactly as described. Make sure you remember to make the script executable (chmod +x .sleep). It's pretty cool; close the lid, and next time you open it, you're at the login screen, but still logged in thanks to fast user switching.]

