Unfortunately if you do things that involve media or the internet your system will become more and more of a hurdle. I have no problems doing spreadsheets, word processing, and some other tasks on old machine, but viewing some rather trivial websites and watching newer HD video just chokes it.
I'm all in favor of using old machines, but not as your sole computer. The transition to a newer machine and newer applications (often required, since lots of big stuff used in 2006 won't even run on new computers) can be a pain, and doesn't get better with time. And if you wait to the day it inevitably dies, ouch plus. That hard drive in there is only gonna last so long. OTOH, you can replace the drive in that machine; not trivial, and maybe not worth it, but doable.
Yosemite is gonna be a free upgrade for everyone, so unlike back in the Snow Leopard days you don't have to wait to buy a computer to avoid paying for a new system. iMacs, especially refurbs, are still great deals. There will always be something faster, smaller coming soon, but if you get a new one with a Fusion or SSD drive (and you should definitely do so) you'll be amazed at the speed. And you'll probably be good to go for another 7 years.