G5 iMacs don't get much love around here because of the problems with early models but I've had a few and they're all great.
I bought the OPs model when it first came out - it felt like a huge leap over the 1Ghz 12" Powerbook I'd got the year before - especially with the whizzbang Apple Remote plus Front Row factor!
I currently have the 20" iSight model with the max 2.5Gb RAM. I think Leopard performs well when there's a GPU big enough for it to stretch it's claws in and the iSight's have a great GPU in the Radeon X600.
I only put mine back to Tiger as I'm using it as a media hub in my living room and wanted the thinnest install possible - it's running XBMC as it has a compatibility and performance edge over Front Row.
So...if you can, get more memory in and switch to Leopard - you can by the way, take a Leopard iso and slim it to fit onto a standard DVD - plenty of guides online.