For $150, it sounds like a good way to become familiar with OS X. My G5 iMac, a 17", runs Leopard just fine, and is great for everyday tasks such as email, web browsing, Office, iWork, iLife, etc. It's not going to cut it for cutting edge games, and you're not going to render movies with blazingly fast speed, but it's still a solid machine.
If you're looking over the machine before you buy it, there are a few things to look out for. First, obviously, boot it and make sure it loads into the OS. Check the screen for artifacts- a failing video card can cause some strange display issues. Check the back of the machine for black dust around the exhaust port- a thick layer of the stuff is an indicator that the power supply may be on its last legs. If you have the opportunity to open the case (and depending on the model, it's either really easy and quick or more of a involved process), look for any bulging or leaking capacitors. Bad caps, if you're not aware, has been a significant point of failure for many G5 iMacs.
Assuming the machine isn't in awful condition, I say take the plunge. If you can find RAM cheaply, the machine definitely will benefit from running at 2 GB. Make sure you let us know what you decide!