"Better" is a relative term...
However, look at it this way: the two significant differences are the number of cores, and the amount of RAM. The clock speeds, while different, are less of a noticeable change.
You CAN add more RAM to the 4GB configuration. I believe the max is 16GB.
You CAN'T change the processor to add more cores. Not without buying a new iMac, that is...
I'd go for the quad core with 4GB RAM, and add RAM (from an aftermarket vendor) later. 4GB will get you through 6 months of usage or so, before you'll be looking to improve things.
(I'd probably be fine with 4 for longer. I'm running a 2.33 C2D MBP with 3gigs of RAM...)
