Yes it is possible to use a SATA drive in an Ultrabay 2000 adapter and have it boot. In fact, when i saw this post it reminded me that I had to perform a system backup on my T23. So here's what I used and how I did it:
- Ultrabay 2000 SATA HD adapter, sourced from eBay:
http://cgi.ebay.com/250730717947 - it's not a genuine IBM part but it does (mostly) work as advertised
- 500GB Seagate Momentus 7200 SATA drive (ST9500420AS)
- 02K8668 ATRX port replicator; because of the...
- 05K6187/05K8874 External floppy drive housing and floppy drive (600 series)
- Ghost 2003 boot diskette
I use the port replicator/external floppy drive as my standard way to boot the Thinkpad with a floppy and still have the Ultrabay free. Why don't I use a USB floppy drive? I have more of these setups than I do a proper USB floppy

. With the 100GB main drive in the T23's HD bay and the blank 500GB Seagate drive in the SATA Ultrabay adapter, I boot the system using the Ghost floppy. The only real problem with the eBay SATA adapter is that it does not accept a hard drive with the caddy attached. There's a plastic tray with a hole cut out so there's no problem with shorting out the drive if it's mounted "bare". I cloned the 65GB worth of data into a 250GB partition I defined from within Ghost. It took about 76 minutes (~840MB/min). I then removed the IDE drive and booted the system from the SATA drive without any problems. This post is being typed from the T23 with the SATA drive.