The refurb white iMacs are at a pretty good price, although, alas, they are "state of the art" for ca. 2005 at this stage. It looks like you lose about 30% in terms of performance, but gain a much better display and save about 20% of your hard-earned.
Of course, it's a refurb lottery. I don't know what is Apple's attitude towards returning what they send you if it's not in the shape you'd like it to be when you receive it.
I haven't ruled out getting a white iMac because of issues with glossy screens, but as you say, there's also a significant compromise in performance, & on any non-upgradeable AIOs that's something I can't readily overlook.
AFAIK, Apple's attitude to refurbs seems to be no returns accepted unless the item is clearly faulty. So for eg., a few dead pixels, minor scratches, etc. wouldn't count as just cause, which seems fair enough. Then again, not being able to have 3 years Apple Care on refurbs makes me hesitate in case of more serious problems developing, however unlikely.
From what I've read, there seems to be a difference in screen quality between the 17" white iMac & the 2 bigger white iMacs. Certainly the failure rate for 17" iMac screens seems to be significantly higher (as anyone can see by Googling this issue). So yes, certainly a bit of a lottery, as is buying one from eBay (another possibility I've considered).
The best solution for me may be to get a new updated Mini when it's released & a PC for gaming, but as I'm getting tired of waiting & I won't buy a dated GMA950 Mini at current prices, some of these pre-updated iMac sales are increasingly tempting (& buying from JL also gets you a 2 year guarantee). Though the iMac's glossy screen is definitely a drawback (most people either love them or hate them), there's always my trusty iBook to fall back on whenever the glare gets too much.
Frankly, even though I understand some of the reasoning behind it (ie. despite Mac market share increasing, Mac Pro sales were suffering & losing out to matte screen iMac sales) I still think it's ridiculous that, despite achieving record profits, Apple leaves consumers with so little choice.