Write down the choices (pros/cons, additional things you would need for a specific setup) for you budget - seriously.
How much storage will you need (don't forget about space for backup), how much screen real-estate, memory, software etc. Then take some time to research what your budget gets you on ebay, or in the apple store (look for refurbished macs. too!), including all additional things like external HDD-enclosures, cables, everything.
I had to make the same choice recently, and I really rather wanted a G5 because it's so much more of a workhorse. The iMac is a very nice machine if what it offers (which is lot) is all you need. But when you have constantly a couple of devices plugged in (drives, scanner, camera, 2nd LCD; +printer, keyboard, tv and network if you do not want to spend a lot on wireless devices), having the LCD screwed to the computer suddenly turns from advantage to an obstacle, not to mention what it looks like. You also have a lot more options (external SATA, 2nd GPU/more Displays etc.), and upgrades are cheaper for a lot of things (e.g. HDDs).
On the other Hand, Intel does rule now, no matter if G5-owners like it or not. There are already some Intel-only applications (Games, Virtualization and Adobe Premiere come to my mind) and the number of them will increase. Still, the 90% of all applications will keep running on G5s for the years to come, and who needs Premiere when he can have Final Cut.
So, for most of the time, my mind was set to "G5" - until I saw what most of them sell for @ ebay: Please don't flame me, but considering the new CPU-architecture and the age of the systems I personally think that the prices are way to high. A big factor for me was also, that I didn't want to spend 1k+ without getting any warranty.
So I already decided to go iMac when a friend offered me a G5 2.0 DP at a very good price - I have it for a couple of days now and could not be happier.
Bottom line: Consider the price of the whole system you'll probably need until the next upgrade. Set a time-limit to find a G5 that's worth it for you, keep watching the refurb-section of the apple store; buy a new, regular iMac if you do not find a better deal in the given timeframe.