I also have a C2D iMac with 4GB RAM. This month I installed Parallels 5 with Windows 7, and got the products to work. Installation was easy. On the downside, I couldn't get Parallels/Windows 7 to run the Blue Mars client (3D virtual world platform using CryENGINE2 powered graphics), so uninstalled Parallels and the Windows 7.
Set up Apple's Boot Camp instead and installed Windows 7 under Boot Camp. Blue Mars client runs without any problems. Running this software was my main need for Windows 7. So I vote for using Apple's Boot Camp to run Windows 7.