Can this be done and what software would play them?
1, Lg BP40NS20 is surely Mac OS X ML compatible - I use it on mine.
2, I don't recommend native BD player apps - they're pretty incapable. (There is a free plug-in for VLC but it's pretty bad IMHO.) It's the best to rip the entire BD via MakeMKV into MKV's and watch them directly via VLC, played from the SSD. Ripping only takes 20-30 minutes.
Cool is the drive relatively cheap?
This is worth knowing....been looking for a drive too. I assume that one will also work with my iMac?
You only need a read-only drive. The faster the drive reads, the pricier it will be. The best way to use it is to rip your blu-ray disc using MakeMkv (free in beta) into an .mkv file. The software allows you to omit extras, pick audio tracks and subtitles, etc. The result is LOSSLESS.
You can play the resulting file via VLC or get a free meda center such as Plex or Xbox.
I don't think it wouldn't. What is your model? I can give a try to mine at work to be absolutely sure (a 2009 one).