(which may be wrong) it already has a G5 processor. I am pretty sure the idea of the upgrade is make the machine faster, but not for "traditional" work loads. The "Integrated Facility For Linux" is basically good old fashioned "cripple ware". The chip and the "MVS" software is knobbled so that you can't run MVS on an IFL. This is despite it having exactly the same instruction set as the normal chips.
So if it will run Linux in an added IFL it will run Linux on the main machine. If you only want one OS then you don't need LPARs. Why you want to do this I am not sure. But if you do then Debian says its fully supported:-
The RICM has a System/390 Multiprise 2003 that should also run Linux.
We we still need to get some cassettes to hold disk SCSI drives, and reconstruct the boot/maintenance PC.
We will get more donated tape drives for the system next week.
We know nearly nothing about this system.