"I have found a late 2006 Imac with Lion (OSX 10.7.2) on it. 24" monitor version."
As of right now, the late 2006 (which I believe is the "first run" of the "Intel iMacs") -will not- run the upcoming Mountain Lion OS.
I believe the model you're talking about is referred to as the "revision B" of the white Intel iMacs. I have a white Intel iMac 24" (purchased in April 2007, just after the first "aluminum" iMacs were released), and it will not run Mountain Lion.
Let me rephrase that a bit: as of -now-, the revision B white Intel iMac won't run ML without some tweaking, which I haven't tried yet (not even sure if that will help). I'll guess the reason is because the boot EFI is not 64-bit "clean", but don't quote me on that.
The revision B's -do- run Lion without problems, mine runs fast and smoothly with it.
If the late 2006 you're considering is in good shape, everything working, and you can get it for a good price, it might be "a good place to start" insofar as the Mac is concerned. But realize when you buy it that you will be "left behind" a bit as the new OS moves forward.
$400 is a decent price. If you already have Windows, have you given some thought to picking up a late-model, refurbished (by Apple) Mac Mini? It will have a more-modern processor, and you can just plug in your existing mouse, keyboard, and monitor....