Yawn, the real iMac killer is going to be the Asus EEE all-in-one. No one is going to compete with Apple when you are comparing machines "in the same class" (that is, in the $1200-2000 range) because of OSX, iLife, and the fantastic iMac design...
The EEE all-in-one, though, is going to be slower, smaller, and most importantly CHEAPER than the iMac. I read it'll have 1.6ghz Intel "atom", GMA950, 120gb HDD, 1gb RAM, a 19" widescreen display, USB/ethernet/wifi/etc for about $400 or so. Runs Linux or Windows, and I'm sure OSX will get shoehorned on there soon after release.
That's going to be a tough market for Apple to compete in - I've long felt they are "over building" their lowest end machines - most people just don't need that much power.